Correlation Between Computer Modelling and CurrentC Power

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

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

Diversification Opportunities for Computer Modelling and CurrentC Power

-0.05

Correlation Coefficient

Computer Modelling  CurrentC Power

Good diversification

The 3 months correlation between Computer and CurrentC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and CurrentC Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CurrentC Power and Computer Modelling 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 Modelling Group are associated (or correlated) with CurrentC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CurrentC Power has no effect on the direction of Computer Modelling i.e., Computer Modelling and CurrentC Power go up and down completely randomly.

Pair Corralation between Computer Modelling and CurrentC Power

Assuming the 90 days horizon Computer Modelling Group is expected to under-perform the CurrentC Power. But the pink sheet apears to be less risky and, when comparing its historical volatility, Computer Modelling Group is 10.64 times less risky than CurrentC Power. The pink sheet trades about -0.1 of its potential returns per unit of risk. The CurrentC Power is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  20.00  in CurrentC Power on October 10, 2024 and sell it today you would earn a total of  1.00  from holding CurrentC Power or generate 5.0% return on investment over 90 days.

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

Computer Modelling Group  vs.  CurrentC Power

Computer Modelling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer Modelling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CurrentC Power

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Computer Modelling and CurrentC Power

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

The idea behind Computer Modelling Group and CurrentC Power 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.