Correlation Between CN MODERN and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both CN MODERN and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on CN MODERN and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and NAKED WINES.
Diversification Opportunities for CN MODERN and NAKED WINES
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and NAKED is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of CN MODERN i.e., CN MODERN and NAKED WINES go up and down completely randomly.
Pair Corralation between CN MODERN and NAKED WINES
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 0.6 times more return on investment than NAKED WINES. However, CN MODERN DAIRY is 1.67 times less risky than NAKED WINES. It trades about 0.01 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.18 per unit of risk. If you would invest 9.25 in CN MODERN DAIRY on September 1, 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. NAKED WINES PLC
Performance |
| Timeline |
| CN MODERN DAIRY |
| NAKED WINES PLC |
CN MODERN and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and NAKED WINES
The main advantage of trading using opposite CN MODERN and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| CN MODERN vs. Fast Retailing Co | CN MODERN vs. National Retail Properties | CN MODERN vs. AAC TECHNOLOGHLDGADR | CN MODERN vs. GLG LIFE TECH |
| NAKED WINES vs. ANDREW PELLER LTD | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |