Correlation Between CN MODERN and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both CN MODERN and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on CN MODERN and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and STORE ELECTRONIC.
Diversification Opportunities for CN MODERN and STORE ELECTRONIC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between 07M and STORE is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of CN MODERN i.e., CN MODERN and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between CN MODERN and STORE ELECTRONIC
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 1.06 times more return on investment than STORE ELECTRONIC. However, CN MODERN is 1.06 times more volatile than STORE ELECTRONIC. It trades about 0.01 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about -0.08 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. STORE ELECTRONIC
Performance |
| Timeline |
| CN MODERN DAIRY |
| STORE ELECTRONIC |
CN MODERN and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and STORE ELECTRONIC
The main advantage of trading using opposite CN MODERN and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC'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 |
| STORE ELECTRONIC vs. CHIBA BANK | STORE ELECTRONIC vs. WESTLAKE CHEMICAL | STORE ELECTRONIC vs. Heartland Financial USA | STORE ELECTRONIC vs. Mitsui Chemicals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |