Correlation Between CDW Corp and Global Blockchain
Can any of the company-specific risk be diversified away by investing in both CDW Corp and Global Blockchain 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 Global Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Global Blockchain Acquisition, you can compare the effects of market volatilities on CDW Corp and Global Blockchain 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 Global Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Global Blockchain.
Diversification Opportunities for CDW Corp and Global Blockchain
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDW and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain 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 Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of CDW Corp i.e., CDW Corp and Global Blockchain go up and down completely randomly.
Pair Corralation between CDW Corp and Global Blockchain
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Global Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 14.15 times less risky than Global Blockchain. The stock trades about -0.15 of its potential returns per unit of risk. The Global Blockchain Acquisition is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6.13 in Global Blockchain Acquisition on September 1, 2024 and sell it today you would earn a total of 5.87 from holding Global Blockchain Acquisition or generate 95.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
CDW Corp vs. Global Blockchain Acquisition
Performance |
| Timeline |
| CDW Corp |
| Global Blockchain |
CDW Corp and Global Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Global Blockchain
The main advantage of trading using opposite CDW Corp and Global Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Global Blockchain 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 Global Blockchain will offset losses from the drop in Global Blockchain's long position.| CDW Corp vs. Desktop Metal | CDW Corp vs. Fabrinet | CDW Corp vs. Knowles Cor | CDW Corp vs. Ubiquiti Networks |
| Global Blockchain vs. Desktop Metal | Global Blockchain vs. Fabrinet | Global Blockchain vs. Knowles Cor | Global Blockchain vs. Ubiquiti Networks |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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