Correlation Between CN MODERN and EAT WELL
Can any of the company-specific risk be diversified away by investing in both CN MODERN and EAT WELL 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 EAT WELL 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 EAT WELL INVESTMENT, you can compare the effects of market volatilities on CN MODERN and EAT WELL 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 EAT WELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and EAT WELL.
Diversification Opportunities for CN MODERN and EAT WELL
Pay attention - limited upside
The 3 months correlation between 07M and EAT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and EAT WELL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAT WELL INVESTMENT 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 EAT WELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAT WELL INVESTMENT has no effect on the direction of CN MODERN i.e., CN MODERN and EAT WELL go up and down completely randomly.
Pair Corralation between CN MODERN and EAT WELL
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 0.9 times more return on investment than EAT WELL. However, CN MODERN DAIRY is 1.11 times less risky than EAT WELL. It trades about 0.01 of its potential returns per unit of risk. EAT WELL INVESTMENT is currently generating about -0.03 per unit of risk. If you would invest 10.00 in CN MODERN DAIRY on October 16, 2024 and sell it today you would lose (0.25) from holding CN MODERN DAIRY or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. EAT WELL INVESTMENT
Performance |
| Timeline |
| CN MODERN DAIRY |
| EAT WELL INVESTMENT |
CN MODERN and EAT WELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and EAT WELL
The main advantage of trading using opposite CN MODERN and EAT WELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, EAT WELL 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 EAT WELL will offset losses from the drop in EAT WELL's long position.| CN MODERN vs. China Reinsurance | CN MODERN vs. Delta Air Lines | CN MODERN vs. SEALED AIR | CN MODERN vs. Pentair plc |
| EAT WELL vs. TYSON FOODS A | EAT WELL vs. CN MODERN DAIRY | EAT WELL vs. GWILLI FOOD | EAT WELL vs. CarsalesCom |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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