Correlation Between Computer Modelling and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Computer Modelling and INTEL CDR 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 Computer Modelling and INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Modelling Group and INTEL CDR, you can compare the effects of market volatilities on Computer Modelling and INTEL CDR 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 Computer Modelling with a short position of INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and INTEL CDR.
Diversification Opportunities for Computer Modelling and INTEL CDR
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Computer and INTEL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and Computer Modelling 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 Computer Modelling Group are associated (or correlated) with INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Computer Modelling i.e., Computer Modelling and INTEL CDR go up and down completely randomly.
Pair Corralation between Computer Modelling and INTEL CDR
Assuming the 90 days trading horizon Computer Modelling Group is expected to under-perform the INTEL CDR. In addition to that, Computer Modelling is 1.03 times more volatile than INTEL CDR. It trades about -0.13 of its total potential returns per unit of risk. INTEL CDR is currently generating about 0.16 per unit of volatility. If you would invest 1,269 in INTEL CDR on September 1, 2024 and sell it today you would earn a total of 145.00 from holding INTEL CDR or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Computer Modelling Group vs. INTEL CDR
Performance |
| Timeline |
| Computer Modelling |
| INTEL CDR |
Computer Modelling and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Modelling and INTEL CDR
The main advantage of trading using opposite Computer Modelling and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Modelling position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR's long position.| Computer Modelling vs. Pason Systems | Computer Modelling vs. Evertz Technologies Limited | Computer Modelling vs. Descartes Systems Group | Computer Modelling vs. Enerflex |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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