Correlation Between EPAM Systems and Widepoint
Can any of the company-specific risk be diversified away by investing in both EPAM Systems and Widepoint 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 EPAM Systems and Widepoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and Widepoint C, you can compare the effects of market volatilities on EPAM Systems and Widepoint 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 EPAM Systems with a short position of Widepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and Widepoint.
Diversification Opportunities for EPAM Systems and Widepoint
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPAM and Widepoint is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Widepoint C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widepoint C and EPAM Systems 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 EPAM Systems are associated (or correlated) with Widepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widepoint C has no effect on the direction of EPAM Systems i.e., EPAM Systems and Widepoint go up and down completely randomly.
Pair Corralation between EPAM Systems and Widepoint
Given the investment horizon of 90 days EPAM Systems is expected to generate 1.16 times less return on investment than Widepoint. But when comparing it to its historical volatility, EPAM Systems is 1.51 times less risky than Widepoint. It trades about 0.3 of its potential returns per unit of risk. Widepoint C is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 368.00 in Widepoint C on August 24, 2024 and sell it today you would earn a total of 110.00 from holding Widepoint C or generate 29.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPAM Systems vs. Widepoint C
Performance |
| Timeline |
| EPAM Systems |
| Widepoint C |
EPAM Systems and Widepoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPAM Systems and Widepoint
The main advantage of trading using opposite EPAM Systems and Widepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems position performs unexpectedly, Widepoint 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 Widepoint will offset losses from the drop in Widepoint's long position.| EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
| Widepoint vs. Data Storage Corp | Widepoint vs. Usio Inc | Widepoint vs. ARB IOT Group | Widepoint vs. FiscalNote Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |