Correlation Between CN MODERN and Strategic Education
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on CN MODERN and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Strategic Education.
Diversification Opportunities for CN MODERN and Strategic Education
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 07M and Strategic is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of CN MODERN i.e., CN MODERN and Strategic Education go up and down completely randomly.
Pair Corralation between CN MODERN and Strategic Education
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 3.51 times more return on investment than Strategic Education. However, CN MODERN is 3.51 times more volatile than Strategic Education. It trades about 0.13 of its potential returns per unit of risk. Strategic Education is currently generating about 0.0 per unit of risk. If you would invest 9.25 in CN MODERN DAIRY on October 30, 2024 and sell it today you would earn a total of 1.75 from holding CN MODERN DAIRY or generate 18.92% 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. Strategic Education
Performance |
| Timeline |
| CN MODERN DAIRY |
| Strategic Education |
CN MODERN and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Strategic Education
The main advantage of trading using opposite CN MODERN and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| CN MODERN vs. CHAMPION IRON | CN MODERN vs. Coffee Holding Co | CN MODERN vs. Micron Technology | CN MODERN vs. Check Point Software |
| Strategic Education vs. Corporate Travel Management | Strategic Education vs. Taylor Morrison Home | Strategic Education vs. CEOTRONICS | Strategic Education vs. AGF Management Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |