Correlation Between CN MODERN and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on CN MODERN and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Virtus Investment.
Diversification Opportunities for CN MODERN and Virtus Investment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 07M and Virtus is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of CN MODERN i.e., CN MODERN and Virtus Investment go up and down completely randomly.
Pair Corralation between CN MODERN and Virtus Investment
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 2.01 times more return on investment than Virtus Investment. However, CN MODERN is 2.01 times more volatile than Virtus Investment Partners. It trades about -0.14 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about -0.31 per unit of risk. If you would invest 11.00 in CN MODERN DAIRY on October 19, 2024 and sell it today you would lose (1.20) from holding CN MODERN DAIRY or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Virtus Investment Partners
Performance |
| Timeline |
| CN MODERN DAIRY |
| Virtus Investment |
CN MODERN and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Virtus Investment
The main advantage of trading using opposite CN MODERN and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| CN MODERN vs. Addtech AB | CN MODERN vs. SOFI TECHNOLOGIES | CN MODERN vs. NetSol Technologies | CN MODERN vs. THORNEY TECHS LTD |
| Virtus Investment vs. GRUPO CARSO A1 | Virtus Investment vs. THAI BEVERAGE | Virtus Investment vs. CN MODERN DAIRY | Virtus Investment vs. MOLSON RS BEVERAGE |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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