Correlation Between CN MODERN and Laureate Education
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on CN MODERN and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Laureate Education.
Diversification Opportunities for CN MODERN and Laureate Education
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 07M and Laureate is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of CN MODERN i.e., CN MODERN and Laureate Education go up and down completely randomly.
Pair Corralation between CN MODERN and Laureate Education
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.06 times more return on investment than Laureate Education. However, CN MODERN is 2.06 times more volatile than Laureate Education. It trades about 0.21 of its potential returns per unit of risk. Laureate Education is currently generating about 0.13 per unit of risk. If you would invest 9.65 in CN MODERN DAIRY on September 15, 2024 and sell it today you would earn a total of 1.35 from holding CN MODERN DAIRY or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Laureate Education
Performance |
| Timeline |
| CN MODERN DAIRY |
| Laureate Education |
CN MODERN and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Laureate Education
The main advantage of trading using opposite CN MODERN and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education's long position.The idea behind CN MODERN DAIRY and Laureate Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Laureate Education vs. IDP EDUCATION LTD | Laureate Education vs. Superior Plus Corp | Laureate Education vs. SIVERS SEMICONDUCTORS AB | Laureate Education vs. Norsk Hydro ASA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |