Correlation Between CN MODERN and MOVIE GAMES
Can any of the company-specific risk be diversified away by investing in both CN MODERN and MOVIE GAMES 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 MOVIE GAMES 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 MOVIE GAMES SA, you can compare the effects of market volatilities on CN MODERN and MOVIE GAMES 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 MOVIE GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and MOVIE GAMES.
Diversification Opportunities for CN MODERN and MOVIE GAMES
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 07M and MOVIE is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and MOVIE GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOVIE GAMES SA 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 MOVIE GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOVIE GAMES SA has no effect on the direction of CN MODERN i.e., CN MODERN and MOVIE GAMES go up and down completely randomly.
Pair Corralation between CN MODERN and MOVIE GAMES
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.63 times more return on investment than MOVIE GAMES. However, CN MODERN is 2.63 times more volatile than MOVIE GAMES SA. It trades about 0.19 of its potential returns per unit of risk. MOVIE GAMES SA is currently generating about 0.03 per unit of risk. If you would invest 11.00 in CN MODERN DAIRY on November 27, 2024 and sell it today you would earn a total of 2.00 from holding CN MODERN DAIRY or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. MOVIE GAMES SA
Performance |
| Timeline |
| CN MODERN DAIRY |
| MOVIE GAMES SA |
CN MODERN and MOVIE GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and MOVIE GAMES
The main advantage of trading using opposite CN MODERN and MOVIE GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, MOVIE GAMES 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 MOVIE GAMES will offset losses from the drop in MOVIE GAMES's long position.| CN MODERN vs. MARKET VECTR RETAIL | CN MODERN vs. AEON STORES | CN MODERN vs. Iridium Communications | CN MODERN vs. Burlington Stores |
| MOVIE GAMES vs. CanSino Biologics | MOVIE GAMES vs. HUTCHISON TELECOMM | MOVIE GAMES vs. Spirent Communications plc | MOVIE GAMES vs. Citic Telecom International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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