Correlation Between CDW Corp and Isracard
Can any of the company-specific risk be diversified away by investing in both CDW Corp and Isracard 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 Isracard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and Isracard, you can compare the effects of market volatilities on CDW Corp and Isracard 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 Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and Isracard.
Diversification Opportunities for CDW Corp and Isracard
Very weak diversification
The 3 months correlation between CDW and Isracard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard 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 Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of CDW Corp i.e., CDW Corp and Isracard go up and down completely randomly.
Pair Corralation between CDW Corp and Isracard
Considering the 90-day investment horizon CDW Corp is expected to under-perform the Isracard. But the stock apears to be less risky and, when comparing its historical volatility, CDW Corp is 2.42 times less risky than Isracard. The stock trades about -0.29 of its potential returns per unit of risk. The Isracard is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 134,700 in Isracard on January 24, 2024 and sell it today you would earn a total of 7,000 from holding Isracard or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
CDW Corp vs. Isracard
Performance |
| Timeline |
| CDW Corp |
| Isracard |
CDW Corp and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and Isracard
The main advantage of trading using opposite CDW Corp and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard's long position.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| Isracard vs. Bank Hapoalim | Isracard vs. Bank Leumi Le Israel | Isracard vs. Mizrahi Tefahot | Isracard vs. Israel Discount Bank |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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