Correlation Between CPI Computer and Lanakam SA
Can any of the company-specific risk be diversified away by investing in both CPI Computer and Lanakam SA 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 Lanakam SA 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 Lanakam SA, you can compare the effects of market volatilities on CPI Computer and Lanakam SA 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 Lanakam SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Computer and Lanakam SA.
Diversification Opportunities for CPI Computer and Lanakam SA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPI and Lanakam is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Lanakam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanakam SA 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 Lanakam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanakam SA has no effect on the direction of CPI Computer i.e., CPI Computer and Lanakam SA go up and down completely randomly.
Pair Corralation between CPI Computer and Lanakam SA
Assuming the 90 days trading horizon CPI Computer Peripherals is expected to generate 1.18 times more return on investment than Lanakam SA. However, CPI Computer is 1.18 times more volatile than Lanakam SA. It trades about 0.01 of its potential returns per unit of risk. Lanakam SA is currently generating about -0.01 per unit of risk. If you would invest 61.00 in CPI Computer Peripherals on November 8, 2024 and sell it today you would lose (1.00) from holding CPI Computer Peripherals or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.71% |
| Values | Daily Returns |
CPI Computer Peripherals vs. Lanakam SA
Performance |
| Timeline |
| CPI Computer Peripherals |
| Lanakam SA |
CPI Computer and Lanakam SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPI Computer and Lanakam SA
The main advantage of trading using opposite CPI Computer and Lanakam SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPI Computer position performs unexpectedly, Lanakam SA 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 Lanakam SA will offset losses from the drop in Lanakam SA's long position.| CPI Computer vs. Piraeus Financial Holdings | CPI Computer vs. Optima bank SA | CPI Computer vs. Hellenic Telecommunications Organization | CPI Computer vs. Marfin Investment Group |
| Lanakam SA vs. Daios Plastics SA | Lanakam SA vs. Sidma SA Steel | Lanakam SA vs. Profile Systems Software | Lanakam SA vs. Bank of Greece |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |