Correlation Between Compugroup Medical and Toyota

Can any of the company-specific risk be diversified away by investing in both Compugroup Medical and Toyota 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 Toyota 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 Toyota Motor, you can compare the effects of market volatilities on Compugroup Medical and Toyota 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 Toyota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and Toyota.

Diversification Opportunities for Compugroup Medical and Toyota

-0.66

Correlation Coefficient

Compugroup Medical  Toyota

Excellent diversification

The 3 months correlation between Compugroup and Toyota is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and Toyota Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor 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 Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor has no effect on the direction of Compugroup Medical i.e., Compugroup Medical and Toyota go up and down completely randomly.

Pair Corralation between Compugroup Medical and Toyota

Assuming the 90 days horizon Compugroup Medical SE is expected to generate 0.68 times more return on investment than Toyota. However, Compugroup Medical SE is 1.47 times less risky than Toyota. It trades about 0.14 of its potential returns per unit of risk. Toyota Motor is currently generating about -0.22 per unit of risk. If you would invest  2,200  in Compugroup Medical SE on April 14, 2025 and sell it today you would earn a total of  30.00  from holding Compugroup Medical SE or generate 1.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	45.45%
Values	Daily Returns

Compugroup Medical SE  vs.  Toyota Motor

Compugroup Medical

Risk-Adjusted Performance

OK

Over the last 90 days Compugroup Medical SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Compugroup Medical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Toyota Motor

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Compugroup Medical and Toyota

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

The idea behind Compugroup Medical SE and Toyota Motor 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.