Correlation Between Peer To and Computer Modelling

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

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

Diversification Opportunities for Peer To and Computer Modelling

-0.08

Correlation Coefficient

Peer To  Computer Modelling

Good diversification

The 3 months correlation between Peer and Computer is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Peer To Peer and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling and Peer To 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 Peer To Peer are associated (or correlated) with Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of Peer To i.e., Peer To and Computer Modelling go up and down completely randomly.

Pair Corralation between Peer To and Computer Modelling

Given the investment horizon of 90 days Peer To Peer is expected to generate 10.42 times more return on investment than Computer Modelling. However, Peer To is 10.42 times more volatile than Computer Modelling Group. It trades about 0.12 of its potential returns per unit of risk. Computer Modelling Group is currently generating about -0.11 per unit of risk. If you would invest  0.02  in Peer To Peer on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Peer To Peer or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Peer To Peer  vs.  Computer Modelling Group

Peer To Peer

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peer To Peer are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Peer To reported solid returns over the last few months and may actually be approaching a breakup point.

Computer Modelling

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Peer To and Computer Modelling

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

The idea behind Peer To Peer and Computer Modelling Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.