Correlation Between CompuGroup Medical and ITOCHU

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

Diversification Opportunities for CompuGroup Medical and ITOCHU

-0.51

Correlation Coefficient

CompuGroup Medical  ITOCHU

Excellent diversification

The 3 months correlation between CompuGroup and ITOCHU is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and ITOCHU go up and down completely randomly.

Pair Corralation between CompuGroup Medical and ITOCHU

Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 0.35 times more return on investment than ITOCHU. However, CompuGroup Medical SE is 2.88 times less risky than ITOCHU. It trades about 0.11 of its potential returns per unit of risk. ITOCHU is currently generating about 0.01 per unit of risk. If you would invest  2,210  in CompuGroup Medical SE on April 22, 2025 and sell it today you would earn a total of  56.00  from holding CompuGroup Medical SE or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.88%
Values	Daily Returns

CompuGroup Medical SE  vs.  ITOCHU

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. In spite of comparatively stable basic indicators, CompuGroup Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ITOCHU

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITOCHU has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ITOCHU 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 ITOCHU

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

The idea behind CompuGroup Medical SE and ITOCHU 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.