Correlation Between CN MODERN and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on CN MODERN and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Evolution Mining.
Diversification Opportunities for CN MODERN and Evolution Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 07M and Evolution is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of CN MODERN i.e., CN MODERN and Evolution Mining go up and down completely randomly.
Pair Corralation between CN MODERN and Evolution Mining
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.71 times less return on investment than Evolution Mining. In addition to that, CN MODERN is 1.21 times more volatile than Evolution Mining Limited. It trades about 0.05 of its total potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.1 per unit of volatility. If you would invest 228.00 in Evolution Mining Limited on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Evolution Mining Limited or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Evolution Mining Limited
Performance |
| Timeline |
| CN MODERN DAIRY |
| Evolution Mining |
CN MODERN and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Evolution Mining
The main advantage of trading using opposite CN MODERN and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining'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 |
| Evolution Mining vs. Mitsubishi Gas Chemical | Evolution Mining vs. Shin Etsu Chemical Co | Evolution Mining vs. Siamgas And Petrochemicals | Evolution Mining vs. Tyson Foods |
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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