Correlation Between CN MODERN and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both CN MODERN and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on CN MODERN and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and AECOM TECHNOLOGY.
Diversification Opportunities for CN MODERN and AECOM TECHNOLOGY
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 07M and AECOM is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of CN MODERN i.e., CN MODERN and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between CN MODERN and AECOM TECHNOLOGY
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.75 times less return on investment than AECOM TECHNOLOGY. In addition to that, CN MODERN is 1.93 times more volatile than AECOM TECHNOLOGY. It trades about 0.01 of its total potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.04 per unit of volatility. If you would invest 7,892 in AECOM TECHNOLOGY on October 27, 2024 and sell it today you would earn a total of 2,408 from holding AECOM TECHNOLOGY or generate 30.51% 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. AECOM TECHNOLOGY
Performance |
| Timeline |
| CN MODERN DAIRY |
| AECOM TECHNOLOGY |
CN MODERN and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and AECOM TECHNOLOGY
The main advantage of trading using opposite CN MODERN and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| CN MODERN vs. Micron Technology | CN MODERN vs. CITIC Telecom International | CN MODERN vs. Singapore Telecommunications Limited | CN MODERN vs. SCOTT TECHNOLOGY |
| AECOM TECHNOLOGY vs. SALESFORCE INC CDR | AECOM TECHNOLOGY vs. Carsales | AECOM TECHNOLOGY vs. DATATEC LTD 2 | AECOM TECHNOLOGY vs. Salesforce |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |