Correlation Between CDW and Atea ASA
Can any of the company-specific risk be diversified away by investing in both CDW and Atea ASA 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 Atea ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corporation and Atea ASA, you can compare the effects of market volatilities on CDW and Atea ASA 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 Atea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW and Atea ASA.
Diversification Opportunities for CDW and Atea ASA
Very good diversification
The 3 months correlation between CDW and Atea is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp. and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA 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 Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of CDW i.e., CDW and Atea ASA go up and down completely randomly.
Pair Corralation between CDW and Atea ASA
Assuming the 90 days horizon CDW is expected to generate 50.69 times less return on investment than Atea ASA. But when comparing it to its historical volatility, CDW Corporation is 2.44 times less risky than Atea ASA. It trades about 0.0 of its potential returns per unit of risk. Atea ASA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 281.00 in Atea ASA on August 30, 2024 and sell it today you would earn a total of 861.00 from holding Atea ASA or generate 306.41% 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. Atea ASA
Performance |
| Timeline |
| CDW Corporation |
| Atea ASA |
CDW and Atea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW and Atea ASA
The main advantage of trading using opposite CDW and Atea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW position performs unexpectedly, Atea ASA 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 Atea ASA will offset losses from the drop in Atea ASA's long position.| CDW vs. ULTRA CLEAN HLDGS | CDW vs. GRIFFIN MINING LTD | CDW vs. METHODE ELECTRONICS | CDW vs. Richardson Electronics |
| Atea ASA vs. REGAL ASIAN INVESTMENTS | Atea ASA vs. NAKED WINES PLC | Atea ASA vs. PennyMac Mortgage Investment | Atea ASA vs. Sims Metal Management |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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