Correlation Between CPI Computer and Cenergy Holdings
Can any of the company-specific risk be diversified away by investing in both CPI Computer and Cenergy Holdings 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 CPI Computer and Cenergy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPI Computer Peripherals and Cenergy Holdings SA, you can compare the effects of market volatilities on CPI Computer and Cenergy Holdings 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 CPI Computer with a short position of Cenergy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Computer and Cenergy Holdings.
Diversification Opportunities for CPI Computer and Cenergy Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPI and Cenergy is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and CPI Computer 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 CPI Computer Peripherals are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of CPI Computer i.e., CPI Computer and Cenergy Holdings go up and down completely randomly.
Pair Corralation between CPI Computer and Cenergy Holdings
Assuming the 90 days trading horizon CPI Computer Peripherals is expected to generate 3.6 times more return on investment than Cenergy Holdings. However, CPI Computer is 3.6 times more volatile than Cenergy Holdings SA. It trades about 0.33 of its potential returns per unit of risk. Cenergy Holdings SA is currently generating about 0.22 per unit of risk. If you would invest 50.00 in CPI Computer Peripherals on October 22, 2024 and sell it today you would earn a total of 12.00 from holding CPI Computer Peripherals or generate 24.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 94.12% |
Values | Daily Returns |
CPI Computer Peripherals vs. Cenergy Holdings SA
Performance |
Timeline |
CPI Computer Peripherals |
Cenergy Holdings |
CPI Computer and Cenergy Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CPI Computer and Cenergy Holdings
The main advantage of trading using opposite CPI Computer and Cenergy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Computer position performs unexpectedly, Cenergy Holdings 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 Cenergy Holdings will offset losses from the drop in Cenergy Holdings' long position.CPI Computer vs. Profile Systems Software | CPI Computer vs. Daios Plastics SA | CPI Computer vs. Foodlink AE | CPI Computer vs. Thrace Plastics Holding |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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