Correlation Between CDW Corp and Genesis Growth

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

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

Diversification Opportunities for CDW Corp and Genesis Growth

0.0

Correlation Coefficient

CDW Corp  Genesis Growth

Pay attention - limited upside

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

Pair Corralation between CDW Corp and Genesis Growth

Considering the 90-day investment horizon CDW Corp is expected to generate 5.26 times less return on investment than Genesis Growth. In addition to that, CDW Corp is 1.02 times more volatile than Genesis Growth Tech. It trades about 0.01 of its total potential returns per unit of risk. Genesis Growth Tech is currently generating about 0.03 per unit of volatility. If you would invest  744,960  in Genesis Growth Tech on September 29, 2024 and sell it today you would earn a total of  76,040  from holding Genesis Growth Tech or generate 10.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	55.04%
Values	Daily Returns

CDW Corp  vs.  Genesis Growth Tech

CDW Corp

Risk-Adjusted Performance

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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 uncertain performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Genesis Growth Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CDW Corp and Genesis Growth

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

The idea behind CDW Corp and Genesis Growth Tech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.