Correlation Between CVW CLEANTECH and Amdocs

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

By analyzing existing cross correlation between CVW CLEANTECH INC and Amdocs Limited, you can compare the effects of market volatilities on CVW CLEANTECH and Amdocs 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 CVW CLEANTECH with a short position of Amdocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Amdocs.

Diversification Opportunities for CVW CLEANTECH and Amdocs

0.19

Correlation Coefficient

CVW CLEANTECH  Amdocs

Average diversification

The 3 months correlation between CVW and Amdocs is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Amdocs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs Limited and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs Limited has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Amdocs go up and down completely randomly.

Pair Corralation between CVW CLEANTECH and Amdocs

Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the Amdocs. In addition to that, CVW CLEANTECH is 2.34 times more volatile than Amdocs Limited. It trades about -0.03 of its total potential returns per unit of risk. Amdocs Limited is currently generating about -0.06 per unit of volatility. If you would invest  8,053  in Amdocs Limited on May 28, 2025 and sell it today you would lose (473.00) from holding Amdocs Limited or give up 5.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

CVW CLEANTECH INC  vs.  Amdocs Limited

CVW CLEANTECH INC

Risk-Adjusted Performance

Weakest

Over the last 90 days CVW CLEANTECH INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Amdocs Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Amdocs Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amdocs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CVW CLEANTECH and Amdocs

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

The idea behind CVW CLEANTECH INC and Amdocs Limited 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.