Correlation Between CDW Corp and First Ship
Can any of the company-specific risk be diversified away by investing in both CDW Corp and First Ship 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 First Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and First Ship Lease, you can compare the effects of market volatilities on CDW Corp and First Ship 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 First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and First Ship.
Diversification Opportunities for CDW Corp and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CDW and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of CDW Corp i.e., CDW Corp and First Ship go up and down completely randomly.
Pair Corralation between CDW Corp and First Ship
Considering the 90-day investment horizon CDW Corp is expected to under-perform the First Ship. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 2.26 times less risky than First Ship. The stock trades about -0.05 of its potential returns per unit of risk. The First Ship Lease is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.50 in First Ship Lease on August 25, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. First Ship Lease
Performance |
| Timeline |
| CDW Corp |
| First Ship Lease |
CDW Corp and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and First Ship
The main advantage of trading using opposite CDW Corp and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.| CDW Corp vs. Plexus Corp | CDW Corp vs. Benchmark Electronics | CDW Corp vs. Jabil Circuit | CDW Corp vs. Sanmina |
| First Ship vs. Tandem Diabetes Care | First Ship vs. Microbot Medical | First Ship vs. LENSAR Inc | First Ship vs. Cumberland Pharmaceuticals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |