Correlation Between CN MODERN and FIRST SHIP
Can any of the company-specific risk be diversified away by investing in both CN MODERN and FIRST SHIP 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 FIRST SHIP 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 FIRST SHIP LEASE, you can compare the effects of market volatilities on CN MODERN and FIRST SHIP 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 FIRST SHIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and FIRST SHIP.
Diversification Opportunities for CN MODERN and FIRST SHIP
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and FIRST is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and FIRST SHIP LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SHIP LEASE 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 FIRST SHIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SHIP LEASE has no effect on the direction of CN MODERN i.e., CN MODERN and FIRST SHIP go up and down completely randomly.
Pair Corralation between CN MODERN and FIRST SHIP
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.39 times more return on investment than FIRST SHIP. However, CN MODERN is 2.39 times more volatile than FIRST SHIP LEASE. It trades about 0.02 of its potential returns per unit of risk. FIRST SHIP LEASE is currently generating about -0.39 per unit of risk. If you would invest 11.00 in CN MODERN DAIRY on October 30, 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. FIRST SHIP LEASE
Performance |
| Timeline |
| CN MODERN DAIRY |
| FIRST SHIP LEASE |
CN MODERN and FIRST SHIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and FIRST SHIP
The main advantage of trading using opposite CN MODERN and FIRST SHIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, FIRST SHIP 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 FIRST SHIP will offset losses from the drop in FIRST SHIP's long position.| CN MODERN vs. CHAMPION IRON | CN MODERN vs. Coffee Holding Co | CN MODERN vs. Micron Technology | CN MODERN vs. Check Point Software |
| FIRST SHIP vs. Liberty Broadband | FIRST SHIP vs. Addtech AB | FIRST SHIP vs. NAGOYA RAILROAD | FIRST SHIP vs. Amkor Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |