Correlation Between CDW Corp and US GoldMining
Can any of the company-specific risk be diversified away by investing in both CDW Corp and US GoldMining 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 US GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and US GoldMining Common, you can compare the effects of market volatilities on CDW Corp and US GoldMining 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 US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and US GoldMining.
Diversification Opportunities for CDW Corp and US GoldMining
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDW and USGO is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and US GoldMining Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Common 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 US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Common has no effect on the direction of CDW Corp i.e., CDW Corp and US GoldMining go up and down completely randomly.
Pair Corralation between CDW Corp and US GoldMining
Considering the 90-day investment horizon CDW Corp is expected to under-perform the US GoldMining. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 4.76 times less risky than US GoldMining. The stock trades about -0.26 of its potential returns per unit of risk. The US GoldMining Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,014 in US GoldMining Common on September 12, 2024 and sell it today you would earn a total of 36.00 from holding US GoldMining Common or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CDW Corp vs. US GoldMining Common
Performance |
| Timeline |
| CDW Corp |
| US GoldMining Common |
CDW Corp and US GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and US GoldMining
The main advantage of trading using opposite CDW Corp and US GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, US GoldMining 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 US GoldMining will offset losses from the drop in US GoldMining'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 |
| US GoldMining vs. MP Materials Corp | US GoldMining vs. NioCorp Developments Ltd | US GoldMining vs. Vale SA ADR | US GoldMining vs. Vizsla Resources Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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