Correlation Between CDK Global and Gartner
Can any of the company-specific risk be diversified away by investing in both CDK Global and Gartner 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 CDK Global and Gartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDK Global Holdings and Gartner, you can compare the effects of market volatilities on CDK Global and Gartner 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 CDK Global with a short position of Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDK Global and Gartner.
Diversification Opportunities for CDK Global and Gartner
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDK and Gartner is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CDK Global Holdings and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner and CDK Global 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 CDK Global Holdings are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of CDK Global i.e., CDK Global and Gartner go up and down completely randomly.
Pair Corralation between CDK Global and Gartner
Considering the 90-day investment horizon CDK Global is expected to generate 5.51 times less return on investment than Gartner. But when comparing it to its historical volatility, CDK Global Holdings is 7.34 times less risky than Gartner. It trades about 0.08 of its potential returns per unit of risk. Gartner is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29,004 in Gartner on January 20, 2024 and sell it today you would earn a total of 15,957 from holding Gartner or generate 55.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 10.73% |
| Values | Daily Returns |
CDK Global Holdings vs. Gartner
Performance |
| Timeline |
| CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gartner |
CDK Global and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDK Global and Gartner
The main advantage of trading using opposite CDK Global and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDK Global position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.| CDK Global vs. Playa Hotels Resorts | CDK Global vs. JD Sports Fashion | CDK Global vs. Playtech plc | CDK Global vs. Emerson Radio |
| Gartner vs. Information Services Group | Gartner vs. Home Bancorp | Gartner vs. CRA International | Gartner vs. Aquagold International |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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