Correlation Between CDW Corp and Apple
Can any of the company-specific risk be diversified away by investing in both CDW Corp and Apple 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 Corp and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Apple Inc, you can compare the effects of market volatilities on CDW Corp and Apple 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 Corp with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Apple.
Diversification Opportunities for CDW Corp and Apple
Excellent diversification
The 3 months correlation between CDW and Apple is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and CDW Corp 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 Corp are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CDW Corp i.e., CDW Corp and Apple go up and down completely randomly.
Pair Corralation between CDW Corp and Apple
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Apple. In addition to that, CDW Corp is 1.34 times more volatile than Apple Inc. It trades about -0.08 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.05 per unit of volatility. If you would invest 22,034 in Apple Inc on December 5, 2024 and sell it today you would earn a total of 1,559 from holding Apple Inc or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Apple Inc
Performance |
| Timeline |
| CDW Corp |
| Apple Inc |
CDW Corp and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Apple
The main advantage of trading using opposite CDW Corp and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| CDW Corp vs. CACI International | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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