Correlation Between FRONTEO and CDW Corp

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

Diversification Opportunities for FRONTEO and CDW Corp

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between FRONTEO and CDW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FRONTEO and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp and FRONTEO 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 FRONTEO are associated (or correlated) with CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of FRONTEO i.e., FRONTEO and CDW Corp go up and down completely randomly.

Pair Corralation between FRONTEO and CDW Corp

If you would invest  24,427  in CDW Corp on December 29, 2023 and sell it today you would earn a total of  1,151  from holding CDW Corp or generate 4.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

FRONTEO  vs.  CDW Corp

 Performance 
       Timeline  
FRONTEO 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days FRONTEO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, FRONTEO is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
CDW Corp 

Risk-Adjusted Performance

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Low
 
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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 fragile fundamental indicators, CDW Corp showed solid returns over the last few months and may actually be approaching a breakup point.

FRONTEO and CDW Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FRONTEO and CDW Corp

The main advantage of trading using opposite FRONTEO and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FRONTEO position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp's long position.
The idea behind FRONTEO and CDW Corp 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.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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