Correlation Between GiveMePower Corp and Computershare

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

By analyzing existing cross correlation between GiveMePower Corp and Computershare Ltd ADR, you can compare the effects of market volatilities on GiveMePower Corp and Computershare 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 GiveMePower Corp with a short position of Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of GiveMePower Corp and Computershare.

Diversification Opportunities for GiveMePower Corp and Computershare

-0.89

Correlation Coefficient

GiveMePower Corp  Computershare

Pay attention - limited upside

The 3 months correlation between GiveMePower and Computershare is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding GiveMePower Corp and Computershare Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare ADR and GiveMePower 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 GiveMePower Corp are associated (or correlated) with Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare ADR has no effect on the direction of GiveMePower Corp i.e., GiveMePower Corp and Computershare go up and down completely randomly.

Pair Corralation between GiveMePower Corp and Computershare

Given the investment horizon of 90 days GiveMePower Corp is expected to generate 17.17 times more return on investment than Computershare. However, GiveMePower Corp is 17.17 times more volatile than Computershare Ltd ADR. It trades about 0.18 of its potential returns per unit of risk. Computershare Ltd ADR is currently generating about 0.09 per unit of risk. If you would invest  0.70  in GiveMePower Corp on October 26, 2024 and sell it today you would earn a total of  0.20  from holding GiveMePower Corp or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

GiveMePower Corp  vs.  Computershare Ltd ADR

GiveMePower Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GiveMePower Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, GiveMePower Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Computershare ADR

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare Ltd ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Computershare showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GiveMePower Corp and Computershare

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

The idea behind GiveMePower Corp and Computershare Ltd ADR 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.