Correlation Between Eurasia Mining and CompuGroup Medical

Can any of the company-specific risk be diversified away by investing in both Eurasia Mining and CompuGroup Medical 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 Eurasia Mining and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eurasia Mining Plc and CompuGroup Medical SE, you can compare the effects of market volatilities on Eurasia Mining and CompuGroup Medical 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 Eurasia Mining with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurasia Mining and CompuGroup Medical.

Diversification Opportunities for Eurasia Mining and CompuGroup Medical

0.0

Correlation Coefficient

Eurasia Mining  CompuGroup Medical

Pay attention - limited upside

The 3 months correlation between Eurasia and CompuGroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eurasia Mining Plc and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Eurasia Mining 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 Eurasia Mining Plc are associated (or correlated) with CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Eurasia Mining i.e., Eurasia Mining and CompuGroup Medical go up and down completely randomly.

Pair Corralation between Eurasia Mining and CompuGroup Medical

If you would invest  1,423  in CompuGroup Medical SE on October 26, 2024 and sell it today you would earn a total of  857.00  from holding CompuGroup Medical SE or generate 60.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Eurasia Mining Plc  vs.  CompuGroup Medical SE

Eurasia Mining Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurasia Mining Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eurasia Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CompuGroup Medical

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, CompuGroup Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurasia Mining and CompuGroup Medical

The main advantage of trading using opposite Eurasia Mining and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurasia Mining position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.

The idea behind Eurasia Mining Plc and CompuGroup Medical SE 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.