Correlation Between CDW Corp and InTest
Can any of the company-specific risk be diversified away by investing in both CDW Corp and InTest 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 InTest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and inTest, you can compare the effects of market volatilities on CDW Corp and InTest 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 InTest. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and InTest.
Diversification Opportunities for CDW Corp and InTest
Very good diversification
The 3 months correlation between CDW and InTest is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and inTest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on inTest 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 InTest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of inTest has no effect on the direction of CDW Corp i.e., CDW Corp and InTest go up and down completely randomly.
Pair Corralation between CDW Corp and InTest
Considering the 90-day investment horizon CDW Corp is expected to under-perform the InTest. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 2.14 times less risky than InTest. The stock trades about -0.07 of its potential returns per unit of risk. The inTest is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 975.00 in inTest on August 27, 2024 and sell it today you would lose (198.00) from holding inTest or give up 20.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. inTest
Performance |
| Timeline |
| CDW Corp |
| inTest |
CDW Corp and InTest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and InTest
The main advantage of trading using opposite CDW Corp and InTest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, InTest 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 InTest will offset losses from the drop in InTest's long position.| CDW Corp vs. Plexus Corp | CDW Corp vs. Jabil Circuit | CDW Corp vs. Sanmina | CDW Corp vs. Methode Electronics |
| InTest vs. Axcelis Technologies | InTest vs. Lam Research Corp | InTest vs. Photronics | InTest vs. indie Semiconductor |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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