Correlation Between CN MODERN and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both CN MODERN and GWILLI FOOD 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 GWILLI FOOD 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 GWILLI FOOD, you can compare the effects of market volatilities on CN MODERN and GWILLI FOOD 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 GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and GWILLI FOOD.
Diversification Opportunities for CN MODERN and GWILLI FOOD
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and GWILLI is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI 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 GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of CN MODERN i.e., CN MODERN and GWILLI FOOD go up and down completely randomly.
Pair Corralation between CN MODERN and GWILLI FOOD
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.21 times more return on investment than GWILLI FOOD. However, CN MODERN is 2.21 times more volatile than GWILLI FOOD. It trades about 0.02 of its potential returns per unit of risk. GWILLI FOOD is currently generating about -0.01 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. GWILLI FOOD
Performance |
| Timeline |
| CN MODERN DAIRY |
| GWILLI FOOD |
CN MODERN and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and GWILLI FOOD
The main advantage of trading using opposite CN MODERN and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, GWILLI FOOD 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD'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 |
| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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