Correlation Between Computer Direct and Amir Marketing

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

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

Diversification Opportunities for Computer Direct and Amir Marketing

-0.06

Correlation Coefficient

Computer Direct  Amir Marketing

Good diversification

The 3 months correlation between Computer and Amir is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Computer Direct and Amir Marketing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amir Marketing and Computer Direct 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 Computer Direct are associated (or correlated) with Amir Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amir Marketing has no effect on the direction of Computer Direct i.e., Computer Direct and Amir Marketing go up and down completely randomly.

Pair Corralation between Computer Direct and Amir Marketing

Assuming the 90 days trading horizon Computer Direct is expected to under-perform the Amir Marketing. In addition to that, Computer Direct is 1.11 times more volatile than Amir Marketing and. It trades about -0.01 of its total potential returns per unit of risk. Amir Marketing and is currently generating about 0.09 per unit of volatility. If you would invest  285,400  in Amir Marketing and on December 30, 2024 and sell it today you would earn a total of  26,600  from holding Amir Marketing and or generate 9.32% return on investment over 90 days.

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

Computer Direct  vs.  Amir Marketing and

Computer Direct

Risk-Adjusted Performance

Very Weak

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

Amir Marketing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amir Marketing and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amir Marketing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Computer Direct and Amir Marketing

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

The idea behind Computer Direct and Amir Marketing and 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.