Correlation Between CN MODERN and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Suntory Beverage 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 Suntory Beverage 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 Suntory Beverage Food, you can compare the effects of market volatilities on CN MODERN and Suntory Beverage 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 Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Suntory Beverage.
Diversification Opportunities for CN MODERN and Suntory Beverage
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 07M and Suntory is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of CN MODERN i.e., CN MODERN and Suntory Beverage go up and down completely randomly.
Pair Corralation between CN MODERN and Suntory Beverage
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.45 times more return on investment than Suntory Beverage. However, CN MODERN is 2.45 times more volatile than Suntory Beverage Food. It trades about 0.02 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.12 per unit of risk. If you would invest 10.00 in CN MODERN DAIRY on October 25, 2024 and sell it today you would earn a total of 0.00 from holding CN MODERN DAIRY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Suntory Beverage Food
Performance |
| Timeline |
| CN MODERN DAIRY |
| Suntory Beverage Food |
CN MODERN and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Suntory Beverage
The main advantage of trading using opposite CN MODERN and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Suntory Beverage 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| CN MODERN vs. TRADEDOUBLER AB SK | CN MODERN vs. SIDETRADE EO 1 | CN MODERN vs. FLOW TRADERS LTD | CN MODERN vs. Corporate Office Properties |
| Suntory Beverage vs. Heineken NV | Suntory Beverage vs. HEINEKEN SP ADR | Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Carlsberg AS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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