Correlation Between Computer Modelling and Exco Technologies
Can any of the company-specific risk be diversified away by investing in both Computer Modelling and Exco Technologies 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 Computer Modelling and Exco Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Modelling Group and Exco Technologies Limited, you can compare the effects of market volatilities on Computer Modelling and Exco Technologies 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 Computer Modelling with a short position of Exco Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Modelling and Exco Technologies.
Diversification Opportunities for Computer Modelling and Exco Technologies
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Computer and Exco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Computer Modelling Group and Exco Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exco Technologies and Computer Modelling 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 Computer Modelling Group are associated (or correlated) with Exco Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exco Technologies has no effect on the direction of Computer Modelling i.e., Computer Modelling and Exco Technologies go up and down completely randomly.
Pair Corralation between Computer Modelling and Exco Technologies
Assuming the 90 days trading horizon Computer Modelling Group is expected to generate 1.53 times more return on investment than Exco Technologies. However, Computer Modelling is 1.53 times more volatile than Exco Technologies Limited. It trades about 0.02 of its potential returns per unit of risk. Exco Technologies Limited is currently generating about -0.01 per unit of risk. If you would invest 687.00 in Computer Modelling Group on April 24, 2025 and sell it today you would earn a total of 76.00 from holding Computer Modelling Group or generate 11.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Computer Modelling Group vs. Exco Technologies Limited
Performance |
Timeline |
Computer Modelling |
Exco Technologies |
Computer Modelling and Exco Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Computer Modelling and Exco Technologies
The main advantage of trading using opposite Computer Modelling and Exco Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Modelling position performs unexpectedly, Exco Technologies 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 Exco Technologies will offset losses from the drop in Exco Technologies' long position.Computer Modelling vs. Pason Systems | Computer Modelling vs. Evertz Technologies Limited | Computer Modelling vs. Descartes Systems Group | Computer Modelling vs. Enerflex |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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