Correlation Between CDW Corp and Amplitech
Can any of the company-specific risk be diversified away by investing in both CDW Corp and Amplitech 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 Amplitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Amplitech Group, you can compare the effects of market volatilities on CDW Corp and Amplitech 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 Amplitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Amplitech.
Diversification Opportunities for CDW Corp and Amplitech
Very good diversification
The 3 months correlation between CDW and Amplitech is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Amplitech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplitech Group 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 Amplitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplitech Group has no effect on the direction of CDW Corp i.e., CDW Corp and Amplitech go up and down completely randomly.
Pair Corralation between CDW Corp and Amplitech
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Amplitech. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 3.82 times less risky than Amplitech. The stock trades about -0.09 of its potential returns per unit of risk. The Amplitech Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Amplitech Group on September 2, 2024 and sell it today you would lose (25.00) from holding Amplitech Group or give up 21.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Amplitech Group
Performance |
| Timeline |
| CDW Corp |
| Amplitech Group |
CDW Corp and Amplitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Amplitech
The main advantage of trading using opposite CDW Corp and Amplitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Amplitech 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 Amplitech will offset losses from the drop in Amplitech's long position.| CDW Corp vs. Knowles Cor | CDW Corp vs. Ubiquiti Networks | CDW Corp vs. AmpliTech Group | CDW Corp vs. Viavi Solutions |
| Amplitech vs. Knowles Cor | Amplitech vs. Ubiquiti Networks | Amplitech vs. AmpliTech Group | Amplitech vs. Viavi Solutions |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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