Correlation Between Capstone Technologies and CDW Corp
Can any of the company-specific risk be diversified away by investing in both Capstone Technologies 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 Capstone Technologies and CDW Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Technologies Group and CDW Corp, you can compare the effects of market volatilities on Capstone Technologies 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 Capstone Technologies with a short position of CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Technologies and CDW Corp.
Diversification Opportunities for Capstone Technologies and CDW Corp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capstone and CDW is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Technologies Group and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp and Capstone Technologies 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 Capstone Technologies Group 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 Capstone Technologies i.e., Capstone Technologies and CDW Corp go up and down completely randomly.
Pair Corralation between Capstone Technologies and CDW Corp
Given the investment horizon of 90 days Capstone Technologies Group is expected to under-perform the CDW Corp. In addition to that, Capstone Technologies is 2.85 times more volatile than CDW Corp. It trades about -0.08 of its total potential returns per unit of risk. CDW Corp is currently generating about 0.0 per unit of volatility. If you would invest 18,758 in CDW Corp on September 4, 2024 and sell it today you would lose (696.00) from holding CDW Corp or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Technologies Group vs. CDW Corp
Performance |
| Timeline |
| Capstone Technologies |
| CDW Corp |
Capstone Technologies and CDW Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Technologies and CDW Corp
The main advantage of trading using opposite Capstone Technologies and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Technologies 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.| Capstone Technologies vs. Arhaus Inc | Capstone Technologies vs. Floor Decor Holdings | Capstone Technologies vs. Live Ventures | Capstone Technologies vs. Cisco Systems |
| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |