Correlation Between CN MODERN and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both CN MODERN and TROPHY 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 TROPHY 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 TROPHY GAMES DEV, you can compare the effects of market volatilities on CN MODERN and TROPHY 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and TROPHY GAMES.
Diversification Opportunities for CN MODERN and TROPHY GAMES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 07M and TROPHY is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of CN MODERN i.e., CN MODERN and TROPHY GAMES go up and down completely randomly.
Pair Corralation between CN MODERN and TROPHY GAMES
Assuming the 90 days trading horizon CN MODERN is expected to generate 10.35 times less return on investment than TROPHY GAMES. But when comparing it to its historical volatility, CN MODERN DAIRY is 2.07 times less risky than TROPHY GAMES. It trades about 0.01 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 60.00 in TROPHY GAMES DEV on August 31, 2024 and sell it today you would earn a total of 35.00 from holding TROPHY GAMES DEV or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. TROPHY GAMES DEV
Performance |
| Timeline |
| CN MODERN DAIRY |
| TROPHY GAMES DEV |
CN MODERN and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and TROPHY GAMES
The main advantage of trading using opposite CN MODERN and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, TROPHY 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES'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 |
| TROPHY GAMES vs. JJ SNACK FOODS | TROPHY GAMES vs. LIFEWAY FOODS | TROPHY GAMES vs. Performance Food Group | TROPHY GAMES vs. United Breweries Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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