Correlation Between CN MODERN and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both CN MODERN and SANOK RUBBER 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 CN MODERN and SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and SANOK RUBBER ZY, you can compare the effects of market volatilities on CN MODERN and SANOK RUBBER 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 CN MODERN with a short position of SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and SANOK RUBBER.
Diversification Opportunities for CN MODERN and SANOK RUBBER
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 07M and SANOK is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of CN MODERN i.e., CN MODERN and SANOK RUBBER go up and down completely randomly.
Pair Corralation between CN MODERN and SANOK RUBBER
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 0.94 times more return on investment than SANOK RUBBER. However, CN MODERN DAIRY is 1.07 times less risky than SANOK RUBBER. It trades about 0.13 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.11 per unit of risk. If you would invest 7.20 in CN MODERN DAIRY on September 2, 2024 and sell it today you would earn a total of 2.05 from holding CN MODERN DAIRY or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. SANOK RUBBER ZY
Performance |
| Timeline |
| CN MODERN DAIRY |
| SANOK RUBBER ZY |
CN MODERN and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and SANOK RUBBER
The main advantage of trading using opposite CN MODERN and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| CN MODERN vs. SIVERS SEMICONDUCTORS AB | CN MODERN vs. Darden Restaurants | CN MODERN vs. Reliance Steel Aluminum | CN MODERN vs. Q2M Managementberatung AG |
| SANOK RUBBER vs. T Mobile | SANOK RUBBER vs. National Bank Holdings | SANOK RUBBER vs. The Hanover Insurance | SANOK RUBBER vs. JSC Halyk 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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