Correlation Between CN MODERN and Nanjing Panda
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Nanjing Panda 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 Nanjing Panda 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 Nanjing Panda Electronics, you can compare the effects of market volatilities on CN MODERN and Nanjing Panda 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 Nanjing Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Nanjing Panda.
Diversification Opportunities for CN MODERN and Nanjing Panda
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between 07M and Nanjing is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Nanjing Panda Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Panda Electronics 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 Nanjing Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Panda Electronics has no effect on the direction of CN MODERN i.e., CN MODERN and Nanjing Panda go up and down completely randomly.
Pair Corralation between CN MODERN and Nanjing Panda
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.09 times less return on investment than Nanjing Panda. But when comparing it to its historical volatility, CN MODERN DAIRY is 1.11 times less risky than Nanjing Panda. It trades about 0.12 of its potential returns per unit of risk. Nanjing Panda Electronics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Nanjing Panda Electronics on November 2, 2024 and sell it today you would earn a total of 11.00 from holding Nanjing Panda Electronics or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.03% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Nanjing Panda Electronics
Performance |
| Timeline |
| CN MODERN DAIRY |
| Nanjing Panda Electronics |
CN MODERN and Nanjing Panda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Nanjing Panda
The main advantage of trading using opposite CN MODERN and Nanjing Panda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Nanjing Panda 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 Nanjing Panda will offset losses from the drop in Nanjing Panda's long position.| CN MODERN vs. TreeHouse Foods | CN MODERN vs. ADRIATIC METALS LS 013355 | CN MODERN vs. FIREWEED METALS P | CN MODERN vs. MAGNUM MINING EXP |
| Nanjing Panda vs. AMAG Austria Metall | Nanjing Panda vs. Fortescue Metals Group | Nanjing Panda vs. IMPERIAL TOBACCO | Nanjing Panda vs. URBAN OUTFITTERS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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