Correlation Between CPI Computer and Performance Technologies

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

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

Diversification Opportunities for CPI Computer and Performance Technologies

0.9

Correlation Coefficient

CPI Computer  Performance Technologies

Almost no diversification

The 3 months correlation between CPI and Performance is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Performance Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Technologies and CPI Computer 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 CPI Computer Peripherals are associated (or correlated) with Performance Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Technologies has no effect on the direction of CPI Computer i.e., CPI Computer and Performance Technologies go up and down completely randomly.

Pair Corralation between CPI Computer and Performance Technologies

Assuming the 90 days trading horizon CPI Computer Peripherals is expected to under-perform the Performance Technologies. But the stock apears to be less risky and, when comparing its historical volatility, CPI Computer Peripherals is 1.07 times less risky than Performance Technologies. The stock trades about -0.2 of its potential returns per unit of risk. The Performance Technologies SA is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  660.00  in Performance Technologies SA on September 5, 2024 and sell it today you would lose (139.00) from holding Performance Technologies SA or give up 21.06% of portfolio value over 90 days.

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

CPI Computer Peripherals  vs.  Performance Technologies SA

CPI Computer Peripherals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPI Computer Peripherals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Performance Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performance Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CPI Computer and Performance Technologies

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

The idea behind CPI Computer Peripherals and Performance Technologies SA 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.