Correlation Between Computer Task and International Business
Can any of the company-specific risk be diversified away by investing in both Computer Task and International Business 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 Computer Task and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Task Group and International Business Machines, you can compare the effects of market volatilities on Computer Task and International Business 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 Computer Task with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Task and International Business.
Diversification Opportunities for Computer Task and International Business
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Computer and International is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Computer Task Group and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Computer Task 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 Computer Task Group are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Computer Task i.e., Computer Task and International Business go up and down completely randomly.
Pair Corralation between Computer Task and International Business
Considering the 90-day investment horizon Computer Task is expected to generate 1.48 times less return on investment than International Business. In addition to that, Computer Task is 1.85 times more volatile than International Business Machines. It trades about 0.02 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.07 per unit of volatility. If you would invest 12,295 in International Business Machines on January 17, 2024 and sell it today you would earn a total of 5,830 from holding International Business Machines or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.4% |
| Values | Daily Returns |
Computer Task Group vs. International Business Machine
Performance |
| Timeline |
| Computer Task Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Business |
Computer Task and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Task and International Business
The main advantage of trading using opposite Computer Task and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Task position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Computer Task vs. The Hackett Group | Computer Task vs. CSP Inc | Computer Task vs. Clarivate Plc | Computer Task vs. Nayax |
| International Business vs. Globant SA | International Business vs. Concentrix | International Business vs. CDW Corp | International Business vs. BigBearai 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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