Correlation Between CDW Corp and 828807DM6

Can any of the company-specific risk be diversified away by investing in both CDW Corp and 828807DM6 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 828807DM6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CDW Corp and SPG 22 01 FEB 31, you can compare the effects of market volatilities on CDW Corp and 828807DM6 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 828807DM6. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and 828807DM6.

Diversification Opportunities for CDW Corp and 828807DM6

0.06

Correlation Coefficient

CDW Corp  828807DM6

Significant diversification

The 3 months correlation between CDW and 828807DM6 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and SPG 22 01 FEB 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPG 22 01 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 828807DM6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPG 22 01 has no effect on the direction of CDW Corp i.e., CDW Corp and 828807DM6 go up and down completely randomly.

Pair Corralation between CDW Corp and 828807DM6

Considering the 90-day investment horizon CDW Corp is expected to under-perform the 828807DM6. In addition to that, CDW Corp is 4.47 times more volatile than SPG 22 01 FEB 31. It trades about -0.07 of its total potential returns per unit of risk. SPG 22 01 FEB 31 is currently generating about -0.11 per unit of volatility. If you would invest  8,594  in SPG 22 01 FEB 31 on October 26, 2024 and sell it today you would lose (283.00) from holding SPG 22 01 FEB 31 or give up 3.29% of portfolio value over 90 days.

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

CDW Corp  vs.  SPG 22 01 FEB 31

CDW Corp

Risk-Adjusted Performance

0 of 100

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 latest inconsistent performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

SPG 22 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPG 22 01 FEB 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 828807DM6 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CDW Corp and 828807DM6

The main advantage of trading using opposite CDW Corp and 828807DM6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, 828807DM6 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 828807DM6 will offset losses from the drop in 828807DM6's long position.

The idea behind CDW Corp and SPG 22 01 FEB 31 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.