Correlation Between CN MODERN and ZIJIN MINH
Can any of the company-specific risk be diversified away by investing in both CN MODERN and ZIJIN MINH 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 ZIJIN MINH 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 ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on CN MODERN and ZIJIN MINH 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 ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and ZIJIN MINH.
Diversification Opportunities for CN MODERN and ZIJIN MINH
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 07M and ZIJIN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 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 ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of CN MODERN i.e., CN MODERN and ZIJIN MINH go up and down completely randomly.
Pair Corralation between CN MODERN and ZIJIN MINH
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to under-perform the ZIJIN MINH. But the stock apears to be less risky and, when comparing its historical volatility, CN MODERN DAIRY is 2.17 times less risky than ZIJIN MINH. The stock trades about -0.02 of its potential returns per unit of risk. The ZIJIN MINH UNSPADR20 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,760 in ZIJIN MINH UNSPADR20 on September 2, 2024 and sell it today you would earn a total of 200.00 from holding ZIJIN MINH UNSPADR20 or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CN MODERN DAIRY vs. ZIJIN MINH UNSPADR20
Performance |
| Timeline |
| CN MODERN DAIRY |
| ZIJIN MINH UNSPADR20 |
CN MODERN and ZIJIN MINH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and ZIJIN MINH
The main advantage of trading using opposite CN MODERN and ZIJIN MINH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, ZIJIN MINH 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 ZIJIN MINH will offset losses from the drop in ZIJIN MINH's long position.| CN MODERN vs. SIVERS SEMICONDUCTORS AB | CN MODERN vs. Darden Restaurants | CN MODERN vs. Reliance Steel Aluminum | CN MODERN vs. Q2M Managementberatung AG |
| ZIJIN MINH vs. MEDICAL FACILITIES NEW | ZIJIN MINH vs. ADRIATIC METALS LS 013355 | ZIJIN MINH vs. AECOM TECHNOLOGY | ZIJIN MINH vs. X FAB Silicon Foundries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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