Correlation Between CN MODERN and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both CN MODERN and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on CN MODERN and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and INFORMATION SVC.
Diversification Opportunities for CN MODERN and INFORMATION SVC
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 07M and INFORMATION is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of CN MODERN i.e., CN MODERN and INFORMATION SVC go up and down completely randomly.
Pair Corralation between CN MODERN and INFORMATION SVC
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 3.97 times more return on investment than INFORMATION SVC. However, CN MODERN is 3.97 times more volatile than INFORMATION SVC GRP. It trades about -0.11 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about -0.64 per unit of risk. If you would invest 11.00 in CN MODERN DAIRY on October 14, 2024 and sell it today you would lose (1.30) from holding CN MODERN DAIRY or give up 11.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CN MODERN DAIRY vs. INFORMATION SVC GRP
Performance |
Timeline |
CN MODERN DAIRY |
INFORMATION SVC GRP |
CN MODERN and INFORMATION SVC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CN MODERN and INFORMATION SVC
The main advantage of trading using opposite CN MODERN and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.CN MODERN vs. Platinum Investment Management | CN MODERN vs. Waste Management | CN MODERN vs. Ares Management Corp | CN MODERN vs. Heidelberg Materials AG |
INFORMATION SVC vs. Park Hotels Resorts | INFORMATION SVC vs. Summit Materials | INFORMATION SVC vs. Playa Hotels Resorts | INFORMATION SVC vs. VULCAN MATERIALS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |