Correlation Between CDW Corp and Eltek

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

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

Diversification Opportunities for CDW Corp and Eltek

0.68

Correlation Coefficient

CDW Corp  Eltek

Poor diversification

The 3 months correlation between CDW and Eltek is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of CDW Corp i.e., CDW Corp and Eltek go up and down completely randomly.

Pair Corralation between CDW Corp and Eltek

Considering the 90-day investment horizon CDW Corp is expected to generate 1.75 times less return on investment than Eltek. But when comparing it to its historical volatility, CDW Corp is 1.27 times less risky than Eltek. It trades about 0.05 of its potential returns per unit of risk. Eltek is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  936.00  in Eltek on May 6, 2025 and sell it today you would earn a total of  91.00  from holding Eltek or generate 9.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CDW Corp  vs.  Eltek

CDW Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 4 (%) 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 September 2025.

Eltek

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Eltek may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with CDW Corp and Eltek

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

The idea behind CDW Corp and Eltek 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.