Correlation Between CDW Corp and A SPAC

Can any of the company-specific risk be diversified away by investing in both CDW Corp and A SPAC 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 A SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CDW Corp and A SPAC III, you can compare the effects of market volatilities on CDW Corp and A SPAC 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 A SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and A SPAC.

Diversification Opportunities for CDW Corp and A SPAC

-0.16

Correlation Coefficient

CDW Corp  A SPAC

Good diversification

The 3 months correlation between CDW and ASPC is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and A SPAC III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC III 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC III has no effect on the direction of CDW Corp i.e., CDW Corp and A SPAC go up and down completely randomly.

Pair Corralation between CDW Corp and A SPAC

Considering the 90-day investment horizon CDW Corp is expected to generate 10.93 times more return on investment than A SPAC. However, CDW Corp is 10.93 times more volatile than A SPAC III. It trades about 0.08 of its potential returns per unit of risk. A SPAC III is currently generating about 0.14 per unit of risk. If you would invest  16,626  in CDW Corp on May 2, 2025 and sell it today you would earn a total of  1,368  from holding CDW Corp or generate 8.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

CDW Corp  vs.  A SPAC III

CDW Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, CDW Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

A SPAC III

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC III are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, A SPAC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CDW Corp and A SPAC

The main advantage of trading using opposite CDW Corp and A SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, A SPAC 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 A SPAC will offset losses from the drop in A SPAC's long position.

The idea behind CDW Corp and A SPAC III 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.