Correlation Between CDW Corp and Computer Task

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Can any of the company-specific risk be diversified away by investing in both CDW Corp and Computer Task 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 CDW Corp and Computer Task into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Computer Task Group, you can compare the effects of market volatilities on CDW Corp and Computer Task 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 CDW Corp with a short position of Computer Task. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Computer Task.

Diversification Opportunities for CDW Corp and Computer Task

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CDW and Computer is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Computer Task Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Task Group and CDW Corp 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 CDW Corp are associated (or correlated) with Computer Task. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Task Group has no effect on the direction of CDW Corp i.e., CDW Corp and Computer Task go up and down completely randomly.

Pair Corralation between CDW Corp and Computer Task

If you would invest  24,427  in CDW Corp on December 29, 2023 and sell it today you would earn a total of  1,360  from holding CDW Corp or generate 5.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

CDW Corp  vs.  Computer Task Group

 Performance 
       Timeline  
CDW Corp 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, CDW Corp showed solid returns over the last few months and may actually be approaching a breakup point.
Computer Task Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Computer Task Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Computer Task is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CDW Corp and Computer Task Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CDW Corp and Computer Task

The main advantage of trading using opposite CDW Corp and Computer Task positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Computer Task 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 Computer Task will offset losses from the drop in Computer Task's long position.
The idea behind CDW Corp and Computer Task Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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