Correlation Between CompuGroup Medical and Nrg Energy

Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Nrg Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CompuGroup Medical and Nrg Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CompuGroup Medical SE and Nrg Energy, you can compare the effects of market volatilities on CompuGroup Medical and Nrg Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CompuGroup Medical with a short position of Nrg Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Nrg Energy.

Diversification Opportunities for CompuGroup Medical and Nrg Energy

0.0

Correlation Coefficient

CompuGroup Medical  Nrg Energy

Pay attention - limited upside

The 3 months correlation between CompuGroup and Nrg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Nrg Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nrg Energy and CompuGroup Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CompuGroup Medical SE are associated (or correlated) with Nrg Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nrg Energy has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Nrg Energy go up and down completely randomly.

Pair Corralation between CompuGroup Medical and Nrg Energy

If you would invest  2,170  in CompuGroup Medical SE on December 22, 2024 and sell it today you would earn a total of  80.00  from holding CompuGroup Medical SE or generate 3.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CompuGroup Medical SE  vs.  Nrg Energy

CompuGroup Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CompuGroup Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nrg Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nrg Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nrg Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CompuGroup Medical and Nrg Energy

The main advantage of trading using opposite CompuGroup Medical and Nrg Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Nrg Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nrg Energy will offset losses from the drop in Nrg Energy's long position.

The idea behind CompuGroup Medical SE and Nrg Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..