Correlation Between CPU SOFTWAREHOUSE and MOBILE FACTORY
Can any of the company-specific risk be diversified away by investing in both CPU SOFTWAREHOUSE and MOBILE FACTORY 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 CPU SOFTWAREHOUSE and MOBILE FACTORY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPU SOFTWAREHOUSE and MOBILE FACTORY INC, you can compare the effects of market volatilities on CPU SOFTWAREHOUSE and MOBILE FACTORY 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 CPU SOFTWAREHOUSE with a short position of MOBILE FACTORY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPU SOFTWAREHOUSE and MOBILE FACTORY.
Diversification Opportunities for CPU SOFTWAREHOUSE and MOBILE FACTORY
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPU and MOBILE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CPU SOFTWAREHOUSE and MOBILE FACTORY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOBILE FACTORY INC and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE are associated (or correlated) with MOBILE FACTORY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOBILE FACTORY INC has no effect on the direction of CPU SOFTWAREHOUSE i.e., CPU SOFTWAREHOUSE and MOBILE FACTORY go up and down completely randomly.
Pair Corralation between CPU SOFTWAREHOUSE and MOBILE FACTORY
Assuming the 90 days trading horizon CPU SOFTWAREHOUSE is expected to generate 5.71 times more return on investment than MOBILE FACTORY. However, CPU SOFTWAREHOUSE is 5.71 times more volatile than MOBILE FACTORY INC. It trades about 0.27 of its potential returns per unit of risk. MOBILE FACTORY INC is currently generating about -0.07 per unit of risk. If you would invest 79.00 in CPU SOFTWAREHOUSE on October 11, 2024 and sell it today you would earn a total of 28.00 from holding CPU SOFTWAREHOUSE or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CPU SOFTWAREHOUSE vs. MOBILE FACTORY INC
Performance |
| Timeline |
| CPU SOFTWAREHOUSE |
| MOBILE FACTORY INC |
CPU SOFTWAREHOUSE and MOBILE FACTORY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPU SOFTWAREHOUSE and MOBILE FACTORY
The main advantage of trading using opposite CPU SOFTWAREHOUSE and MOBILE FACTORY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPU SOFTWAREHOUSE position performs unexpectedly, MOBILE FACTORY 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 MOBILE FACTORY will offset losses from the drop in MOBILE FACTORY's long position.| CPU SOFTWAREHOUSE vs. BG Foods | CPU SOFTWAREHOUSE vs. EMPEROR ENT HOTEL | CPU SOFTWAREHOUSE vs. EBRO FOODS | CPU SOFTWAREHOUSE vs. Dalata Hotel Group |
| MOBILE FACTORY vs. Constellation Software | MOBILE FACTORY vs. Easy Software AG | MOBILE FACTORY vs. CPU SOFTWAREHOUSE | MOBILE FACTORY vs. Kingdee International Software |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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