Correlation Between IShares Physical and CompuGroup Medical

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

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

Diversification Opportunities for IShares Physical and CompuGroup Medical

-0.09

Correlation Coefficient

IShares Physical  CompuGroup Medical

Good diversification

The 3 months correlation between IShares and CompuGroup is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and IShares Physical 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 iShares Physical Silver 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 IShares Physical i.e., IShares Physical and CompuGroup Medical go up and down completely randomly.

Pair Corralation between IShares Physical and CompuGroup Medical

Assuming the 90 days trading horizon IShares Physical is expected to generate 7.01 times less return on investment than CompuGroup Medical. But when comparing it to its historical volatility, iShares Physical Silver is 15.68 times less risky than CompuGroup Medical. It trades about 0.21 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,622  in CompuGroup Medical AG on December 30, 2024 and sell it today you would earn a total of  0.00  from holding CompuGroup Medical AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

iShares Physical Silver  vs.  CompuGroup Medical AG

iShares Physical Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Physical Silver are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

CompuGroup Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CompuGroup Medical AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CompuGroup Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Physical and CompuGroup Medical

The main advantage of trading using opposite IShares Physical and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical 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 iShares Physical Silver and CompuGroup Medical AG 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.