Correlation Between CN MODERN and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Treasury Wine 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 Treasury Wine 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 Treasury Wine Estates, you can compare the effects of market volatilities on CN MODERN and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Treasury Wine.
Diversification Opportunities for CN MODERN and Treasury Wine
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and Treasury is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of CN MODERN i.e., CN MODERN and Treasury Wine go up and down completely randomly.
Pair Corralation between CN MODERN and Treasury Wine
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.07 times less return on investment than Treasury Wine. In addition to that, CN MODERN is 1.21 times more volatile than Treasury Wine Estates. It trades about 0.02 of its total potential returns per unit of risk. Treasury Wine Estates is currently generating about 0.02 per unit of volatility. If you would invest 644.00 in Treasury Wine Estates on September 2, 2024 and sell it today you would earn a total of 48.00 from holding Treasury Wine Estates or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Treasury Wine Estates
Performance |
| Timeline |
| CN MODERN DAIRY |
| Treasury Wine Estates |
CN MODERN and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Treasury Wine
The main advantage of trading using opposite CN MODERN and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine's long position.| CN MODERN vs. SIVERS SEMICONDUCTORS AB | CN MODERN vs. Darden Restaurants | CN MODERN vs. Reliance Steel Aluminum | CN MODERN vs. Q2M Managementberatung AG |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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