Correlation Between CDW Corp and Eatware

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

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

Diversification Opportunities for CDW Corp and Eatware

0.0

Correlation Coefficient

CDW Corp  Eatware

Pay attention - limited upside

The 3 months correlation between CDW and Eatware is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Eatware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eatware and CDW Corp 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 CDW Corp are associated (or correlated) with Eatware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eatware has no effect on the direction of CDW Corp i.e., CDW Corp and Eatware go up and down completely randomly.

Pair Corralation between CDW Corp and Eatware

If you would invest  17,395  in CDW Corp on December 20, 2024 and sell it today you would lose (111.00) from holding CDW Corp or give up 0.64% of portfolio value over 90 days.

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

CDW Corp  vs.  Eatware

CDW Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CDW Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, CDW Corp is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Eatware

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eatware has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eatware is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CDW Corp and Eatware

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

The idea behind CDW Corp and Eatware 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.

Check out your portfolio center.

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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.