Correlation Between CDW and Appen
Can any of the company-specific risk be diversified away by investing in both CDW and Appen 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 CDW and Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corporation and Appen Limited, you can compare the effects of market volatilities on CDW and Appen 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 CDW with a short position of Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW and Appen.
Diversification Opportunities for CDW and Appen
Very good diversification
The 3 months correlation between CDW and Appen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp. and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited and CDW 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 CDW Corporation are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen Limited has no effect on the direction of CDW i.e., CDW and Appen go up and down completely randomly.
Pair Corralation between CDW and Appen
Assuming the 90 days horizon CDW Corporation is expected to under-perform the Appen. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corporation is 4.73 times less risky than Appen. The stock trades about -0.07 of its potential returns per unit of risk. The Appen Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Appen Limited on August 27, 2024 and sell it today you would earn a total of 91.00 from holding Appen Limited or generate 252.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp. vs. Appen Limited
Performance |
| Timeline |
| CDW Corporation |
| Appen Limited |
CDW and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW and Appen
The main advantage of trading using opposite CDW and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW position performs unexpectedly, Appen 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 Appen will offset losses from the drop in Appen's long position.| CDW vs. Accenture plc | CDW vs. Cognizant Technology Solutions | CDW vs. Superior Plus Corp | CDW vs. NMI Holdings |
| Appen vs. BOSTON BEER A | Appen vs. THAI BEVERAGE | Appen vs. Tsingtao Brewery | Appen vs. Thai Beverage Public |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges |