Correlation Between CN MODERN and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on CN MODERN and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Stanley Electric.
Diversification Opportunities for CN MODERN and Stanley Electric
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 07M and Stanley is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of CN MODERN i.e., CN MODERN and Stanley Electric go up and down completely randomly.
Pair Corralation between CN MODERN and Stanley Electric
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to under-perform the Stanley Electric. In addition to that, CN MODERN is 5.26 times more volatile than Stanley Electric Co. It trades about -0.11 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about 0.2 per unit of volatility. If you would invest 1,530 in Stanley Electric Co on October 23, 2024 and sell it today you would earn a total of 40.00 from holding Stanley Electric Co or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Stanley Electric Co
Performance |
| Timeline |
| CN MODERN DAIRY |
| Stanley Electric |
CN MODERN and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Stanley Electric
The main advantage of trading using opposite CN MODERN and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| CN MODERN vs. Cardinal Health | CN MODERN vs. CARDINAL HEALTH | CN MODERN vs. RCI Hospitality Holdings | CN MODERN vs. Electronic Arts |
| Stanley Electric vs. Lifeway Foods | Stanley Electric vs. TIANDE CHEMICAL | Stanley Electric vs. Silicon Motion Technology | Stanley Electric vs. CN MODERN DAIRY |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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