Correlation Between World Houseware and CDW Corp

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

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

Diversification Opportunities for World Houseware and CDW Corp

0.0

Correlation Coefficient

World Houseware  CDW Corp

Pay attention - limited upside

The 3 months correlation between World and CDW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding World Houseware Limited and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp and World Houseware 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 World Houseware Limited are associated (or correlated) with CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of World Houseware i.e., World Houseware and CDW Corp go up and down completely randomly.

Pair Corralation between World Houseware and CDW Corp

If you would invest  17,712  in CDW Corp on October 26, 2024 and sell it today you would earn a total of  1,801  from holding CDW Corp or generate 10.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

World Houseware Limited  vs.  CDW Corp

World Houseware

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Houseware Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, World Houseware is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CDW Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDW Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with World Houseware and CDW Corp

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

The idea behind World Houseware Limited and CDW Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.