Correlation Between CPI Computer and Logismos Information

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

By analyzing existing cross correlation between CPI Computer Peripherals and Logismos Information Systems, you can compare the effects of market volatilities on CPI Computer and Logismos Information 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 CPI Computer with a short position of Logismos Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPI Computer and Logismos Information.

Diversification Opportunities for CPI Computer and Logismos Information

0.86

Correlation Coefficient

CPI Computer  Logismos Information

Very poor diversification

The 3 months correlation between CPI and Logismos is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CPI Computer Peripherals and Logismos Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logismos Information and CPI Computer 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 CPI Computer Peripherals are associated (or correlated) with Logismos Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logismos Information has no effect on the direction of CPI Computer i.e., CPI Computer and Logismos Information go up and down completely randomly.

Pair Corralation between CPI Computer and Logismos Information

Assuming the 90 days trading horizon CPI Computer is expected to generate 3.14 times less return on investment than Logismos Information. In addition to that, CPI Computer is 2.23 times more volatile than Logismos Information Systems. It trades about 0.01 of its total potential returns per unit of risk. Logismos Information Systems is currently generating about 0.05 per unit of volatility. If you would invest  99.00  in Logismos Information Systems on September 13, 2024 and sell it today you would earn a total of  37.00  from holding Logismos Information Systems or generate 37.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.98%
Values	Daily Returns

CPI Computer Peripherals  vs.  Logismos Information Systems

CPI Computer Peripherals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPI Computer Peripherals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Logismos Information

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logismos Information Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Logismos Information is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CPI Computer and Logismos Information

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

The idea behind CPI Computer Peripherals and Logismos Information Systems 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.