Correlation Between VIVA WINE and Compugroup Medical

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

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

Diversification Opportunities for VIVA WINE and Compugroup Medical

0.3

Correlation Coefficient

VIVA WINE  Compugroup Medical

Weak diversification

The 3 months correlation between VIVA and Compugroup is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical and VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Compugroup Medical go up and down completely randomly.

Pair Corralation between VIVA WINE and Compugroup Medical

Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 2.0 times more return on investment than Compugroup Medical. However, VIVA WINE is 2.0 times more volatile than Compugroup Medical SE. It trades about 0.15 of its potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.08 per unit of risk. If you would invest  322.00  in VIVA WINE GROUP on December 30, 2024 and sell it today you would earn a total of  54.00  from holding VIVA WINE GROUP or generate 16.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VIVA WINE GROUP  vs.  Compugroup Medical SE

VIVA WINE GROUP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIVA WINE GROUP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIVA WINE reported solid returns over the last few months and may actually be approaching a breakup point.

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 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Compugroup Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VIVA WINE and Compugroup Medical

The main advantage of trading using opposite VIVA WINE and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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 VIVA WINE GROUP 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.