Correlation Between CN MODERN and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both CN MODERN and OPERA SOFTWARE 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 OPERA SOFTWARE 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 OPERA SOFTWARE, you can compare the effects of market volatilities on CN MODERN and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and OPERA SOFTWARE.
Diversification Opportunities for CN MODERN and OPERA SOFTWARE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 07M and OPERA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of CN MODERN i.e., CN MODERN and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between CN MODERN and OPERA SOFTWARE
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 1.49 times more return on investment than OPERA SOFTWARE. However, CN MODERN is 1.49 times more volatile than OPERA SOFTWARE. It trades about 0.08 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.0 per unit of risk. If you would invest 6.19 in CN MODERN DAIRY on October 16, 2024 and sell it today you would earn a total of 3.81 from holding CN MODERN DAIRY or generate 61.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. OPERA SOFTWARE
Performance |
| Timeline |
| CN MODERN DAIRY |
| OPERA SOFTWARE |
CN MODERN and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and OPERA SOFTWARE
The main advantage of trading using opposite CN MODERN and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.| CN MODERN vs. LG Display Co | CN MODERN vs. ePlay Digital | CN MODERN vs. COLUMBIA SPORTSWEAR | CN MODERN vs. Chuangs China Investments |
| OPERA SOFTWARE vs. SAN MIGUEL BREWERY | OPERA SOFTWARE vs. Thai Beverage Public | OPERA SOFTWARE vs. Molson Coors Beverage | OPERA SOFTWARE vs. Suntory Beverage Food |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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