Correlation Between COMPUTERSHARE and Covivio SA

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

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

Diversification Opportunities for COMPUTERSHARE and Covivio SA

-0.89

Correlation Coefficient

COMPUTERSHARE  Covivio SA

Pay attention - limited upside

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

Pair Corralation between COMPUTERSHARE and Covivio SA

Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 0.94 times more return on investment than Covivio SA. However, COMPUTERSHARE is 1.06 times less risky than Covivio SA. It trades about 0.05 of its potential returns per unit of risk. Covivio SA is currently generating about 0.0 per unit of risk. If you would invest  1,395  in COMPUTERSHARE on October 4, 2024 and sell it today you would earn a total of  605.00  from holding COMPUTERSHARE or generate 43.37% return on investment over 90 days.

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

COMPUTERSHARE  vs.  Covivio SA

COMPUTERSHARE

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Covivio SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Covivio SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with COMPUTERSHARE and Covivio SA

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

The idea behind COMPUTERSHARE and Covivio 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.