Correlation Between CDW Corp and Rigetti Computing

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

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

Diversification Opportunities for CDW Corp and Rigetti Computing

0.34

Correlation Coefficient

CDW Corp  Rigetti Computing

Weak diversification

The 3 months correlation between CDW and Rigetti is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Rigetti Computing Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigetti Computing 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 Rigetti Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigetti Computing has no effect on the direction of CDW Corp i.e., CDW Corp and Rigetti Computing go up and down completely randomly.

Pair Corralation between CDW Corp and Rigetti Computing

Considering the 90-day investment horizon CDW Corp is expected to under-perform the Rigetti Computing. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 11.39 times less risky than Rigetti Computing. The stock trades about -0.04 of its potential returns per unit of risk. The Rigetti Computing Warrants is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  743.00  in Rigetti Computing Warrants on December 28, 2024 and sell it today you would lose (421.00) from holding Rigetti Computing Warrants or give up 56.66% of portfolio value over 90 days.

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

CDW Corp  vs.  Rigetti Computing Warrants

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.

Rigetti Computing

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing Warrants are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Rigetti Computing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CDW Corp and Rigetti Computing

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

The idea behind CDW Corp and Rigetti Computing Warrants 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.