Correlation Between CN MODERN and Computer
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on CN MODERN and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Computer.
Diversification Opportunities for CN MODERN and Computer
Very good diversification
The 3 months correlation between 07M and Computer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of CN MODERN i.e., CN MODERN and Computer go up and down completely randomly.
Pair Corralation between CN MODERN and Computer
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 3.28 times more return on investment than Computer. However, CN MODERN is 3.28 times more volatile than Computer And Technologies. It trades about 0.06 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.35 per unit of risk. If you would invest 9.60 in CN MODERN DAIRY on October 10, 2024 and sell it today you would earn a total of 0.35 from holding CN MODERN DAIRY or generate 3.65% 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. Computer And Technologies
Performance |
| Timeline |
| CN MODERN DAIRY |
| Computer And Technologies |
CN MODERN and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Computer
The main advantage of trading using opposite CN MODERN and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| CN MODERN vs. Alfa Financial Software | CN MODERN vs. Australian Agricultural | CN MODERN vs. WIMFARM SA EO | CN MODERN vs. North American Construction |
| Computer vs. Sterling Construction | Computer vs. Australian Agricultural | Computer vs. Dairy Farm International | Computer vs. Tokyu Construction 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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