Correlation Between CDK Global and F5 Networks
Can any of the company-specific risk be diversified away by investing in both CDK Global and F5 Networks 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 F5 Networks 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 F5 Networks, you can compare the effects of market volatilities on CDK Global and F5 Networks 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 F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDK Global and F5 Networks.
Diversification Opportunities for CDK Global and F5 Networks
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CDK and FFIV is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CDK Global Holdings and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks 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 F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of CDK Global i.e., CDK Global and F5 Networks go up and down completely randomly.
Pair Corralation between CDK Global and F5 Networks
If you would invest 5,476 in CDK Global Holdings on January 26, 2024 and sell it today you would earn a total of 0.00 from holding CDK Global Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.61% |
| Values | Daily Returns |
CDK Global Holdings vs. F5 Networks
Performance |
| Timeline |
| CDK Global Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| F5 Networks |
CDK Global and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDK Global and F5 Networks
The main advantage of trading using opposite CDK Global and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDK Global position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| CDK Global vs. Worthington Steel | CDK Global vs. Insteel Industries | CDK Global vs. CECO Environmental Corp | CDK Global vs. Bank of New |
| F5 Networks vs. Sterling Check Corp | F5 Networks vs. Repay Holdings Corp | F5 Networks vs. SPS Commerce | F5 Networks vs. Evertec |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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