Correlation Between CDW Corp and Verisk Analytics

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

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

Diversification Opportunities for CDW Corp and Verisk Analytics

0.32

Correlation Coefficient

CDW Corp  Verisk Analytics

Weak diversification

The 3 months correlation between CDW and Verisk is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Verisk Analytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verisk Analytics 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 Verisk Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verisk Analytics has no effect on the direction of CDW Corp i.e., CDW Corp and Verisk Analytics go up and down completely randomly.

Pair Corralation between CDW Corp and Verisk Analytics

Considering the 90-day investment horizon CDW Corp is expected to generate 1.28 times more return on investment than Verisk Analytics. However, CDW Corp is 1.28 times more volatile than Verisk Analytics. It trades about 0.04 of its potential returns per unit of risk. Verisk Analytics is currently generating about -0.09 per unit of risk. If you would invest  16,337  in CDW Corp on May 6, 2025 and sell it today you would earn a total of  549.00  from holding CDW Corp or generate 3.36% return on investment over 90 days.

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

CDW Corp  vs.  Verisk Analytics

CDW Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, CDW Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Verisk Analytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verisk Analytics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with CDW Corp and Verisk Analytics

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

The idea behind CDW Corp and Verisk Analytics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.