Correlation Between Computer Modelling and Microsoft CDR

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

By analyzing existing cross correlation between Computer Modelling Group and Microsoft CDR, you can compare the effects of market volatilities on Computer Modelling and Microsoft CDR 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 Modelling with a short position of Microsoft CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and Microsoft CDR.

Diversification Opportunities for Computer Modelling and Microsoft CDR

0.02

Correlation Coefficient

Computer Modelling  Microsoft CDR

Significant diversification

The 3 months correlation between Computer and Microsoft is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and Microsoft CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft CDR and Computer Modelling 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 Modelling Group are associated (or correlated) with Microsoft CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft CDR has no effect on the direction of Computer Modelling i.e., Computer Modelling and Microsoft CDR go up and down completely randomly.

Pair Corralation between Computer Modelling and Microsoft CDR

Assuming the 90 days trading horizon Computer Modelling Group is expected to under-perform the Microsoft CDR. In addition to that, Computer Modelling is 2.0 times more volatile than Microsoft CDR. It trades about -0.09 of its total potential returns per unit of risk. Microsoft CDR is currently generating about 0.11 per unit of volatility. If you would invest  2,991  in Microsoft CDR on May 10, 2025 and sell it today you would earn a total of  768.00  from holding Microsoft CDR or generate 25.68% return on investment over 90 days.

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

Computer Modelling Group  vs.  Microsoft CDR

Computer Modelling

Risk-Adjusted Performance

Weakest

Over the last 90 days Computer Modelling Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Microsoft CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft CDR are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Microsoft CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Computer Modelling and Microsoft CDR

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

The idea behind Computer Modelling Group and Microsoft CDR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..