Correlation Between CDW Corp and Knowles Cor
Can any of the company-specific risk be diversified away by investing in both CDW Corp and Knowles Cor 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 Knowles Cor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Knowles Cor, you can compare the effects of market volatilities on CDW Corp and Knowles Cor 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 Knowles Cor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Knowles Cor.
Diversification Opportunities for CDW Corp and Knowles Cor
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDW and Knowles is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor 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 Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of CDW Corp i.e., CDW Corp and Knowles Cor go up and down completely randomly.
Pair Corralation between CDW Corp and Knowles Cor
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Knowles Cor. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 1.13 times less risky than Knowles Cor. The stock trades about -0.2 of its potential returns per unit of risk. The Knowles Cor is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,751 in Knowles Cor on August 31, 2024 and sell it today you would earn a total of 173.00 from holding Knowles Cor or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. Knowles Cor
Performance |
| Timeline |
| CDW Corp |
| Knowles Cor |
CDW Corp and Knowles Cor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Knowles Cor
The main advantage of trading using opposite CDW Corp and Knowles Cor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Knowles Cor 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 Knowles Cor will offset losses from the drop in Knowles Cor's long position.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |