Correlation Between THAI BEVERAGE and Compugroup Medical

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

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

Diversification Opportunities for THAI BEVERAGE and Compugroup Medical

-0.4

Correlation Coefficient

THAI BEVERAGE  Compugroup Medical

Very good diversification

The 3 months correlation between THAI and Compugroup is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical and THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE i.e., THAI BEVERAGE and Compugroup Medical go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and Compugroup Medical

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the Compugroup Medical. In addition to that, THAI BEVERAGE is 2.41 times more volatile than Compugroup Medical SE. It trades about -0.05 of its total potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.08 per unit of volatility. If you would invest  2,170  in Compugroup Medical SE on December 30, 2024 and sell it today you would earn a total of  94.00  from holding Compugroup Medical SE or generate 4.33% return on investment over 90 days.

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

THAI BEVERAGE  vs.  Compugroup Medical SE

THAI BEVERAGE

Risk-Adjusted Performance

Very Weak

Over the last 90 days THAI BEVERAGE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 THAI BEVERAGE and Compugroup Medical

The main advantage of trading using opposite THAI BEVERAGE and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE 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 THAI BEVERAGE 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.