Correlation Between Corporate Travel and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Corporate Travel and CN MODERN 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 Corporate Travel and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Travel Management and CN MODERN DAIRY, you can compare the effects of market volatilities on Corporate Travel and CN MODERN 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 Corporate Travel with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and CN MODERN.
Diversification Opportunities for Corporate Travel and CN MODERN
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and 07M is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Corporate Travel i.e., Corporate Travel and CN MODERN go up and down completely randomly.
Pair Corralation between Corporate Travel and CN MODERN
Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 1.69 times more return on investment than CN MODERN. However, Corporate Travel is 1.69 times more volatile than CN MODERN DAIRY. It trades about 0.28 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about -0.19 per unit of risk. If you would invest 700.00 in Corporate Travel Management on August 29, 2024 and sell it today you would earn a total of 135.00 from holding Corporate Travel Management or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Corporate Travel Management vs. CN MODERN DAIRY
Performance |
| Timeline |
| Corporate Travel Man |
| CN MODERN DAIRY |
Corporate Travel and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Travel and CN MODERN
The main advantage of trading using opposite Corporate Travel and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Corporate Travel vs. AOYAMA TRADING | Corporate Travel vs. MTI WIRELESS EDGE | Corporate Travel vs. ECHO INVESTMENT ZY | Corporate Travel vs. MGIC INVESTMENT |
| CN MODERN vs. Apple Inc | CN MODERN vs. Apple Inc | CN MODERN vs. Superior Plus Corp | CN MODERN vs. SIVERS SEMICONDUCTORS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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