Correlation Between Deep Down and Computer Modelling

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

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

Diversification Opportunities for Deep Down and Computer Modelling

-0.29

Correlation Coefficient

Deep Down  Computer Modelling

Very good diversification

The 3 months correlation between Deep and Computer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Deep Down and Computer Modelling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Modelling and Deep Down 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 Deep Down are associated (or correlated) with Computer Modelling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Modelling has no effect on the direction of Deep Down i.e., Deep Down and Computer Modelling go up and down completely randomly.

Pair Corralation between Deep Down and Computer Modelling

If you would invest  740.00  in Computer Modelling Group on January 25, 2024 and sell it today you would earn a total of  19.00  from holding Computer Modelling Group or generate 2.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Deep Down  vs.  Computer Modelling Group

Deep Down

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deep Down has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Deep Down is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Computer Modelling

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Computer Modelling Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Computer Modelling may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Deep Down and Computer Modelling

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

The idea behind Deep Down and Computer Modelling Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.