Correlation Between CN MODERN and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both CN MODERN and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE, you can compare the effects of market volatilities on CN MODERN and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and MUTUIONLINE.
Diversification Opportunities for CN MODERN and MUTUIONLINE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 07M and MUTUIONLINE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of CN MODERN i.e., CN MODERN and MUTUIONLINE go up and down completely randomly.
Pair Corralation between CN MODERN and MUTUIONLINE
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.89 times less return on investment than MUTUIONLINE. In addition to that, CN MODERN is 2.19 times more volatile than MUTUIONLINE. It trades about 0.02 of its total potential returns per unit of risk. MUTUIONLINE is currently generating about 0.07 per unit of volatility. If you would invest 3,645 in MUTUIONLINE on November 1, 2024 and sell it today you would earn a total of 70.00 from holding MUTUIONLINE or generate 1.92% 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. MUTUIONLINE
Performance |
| Timeline |
| CN MODERN DAIRY |
| MUTUIONLINE |
CN MODERN and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and MUTUIONLINE
The main advantage of trading using opposite CN MODERN and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| CN MODERN vs. PKSHA TECHNOLOGY INC | CN MODERN vs. UNITED RENTALS | CN MODERN vs. Amkor Technology | CN MODERN vs. FUYO GENERAL LEASE |
| MUTUIONLINE vs. EBRO FOODS | MUTUIONLINE vs. GWILLI FOOD | MUTUIONLINE vs. Cal Maine Foods | MUTUIONLINE vs. CN MODERN DAIRY |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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