Correlation Between Gaming and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Gaming 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 Gaming and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and CN MODERN DAIRY, you can compare the effects of market volatilities on Gaming 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 Gaming with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and CN MODERN.
Diversification Opportunities for Gaming and CN MODERN
Good diversification
The 3 months correlation between Gaming and 07M is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure 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 Gaming 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 Gaming and Leisure 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 Gaming i.e., Gaming and CN MODERN go up and down completely randomly.
Pair Corralation between Gaming and CN MODERN
Assuming the 90 days horizon Gaming is expected to generate 37.62 times less return on investment than CN MODERN. But when comparing it to its historical volatility, Gaming and Leisure is 2.7 times less risky than CN MODERN. It trades about 0.0 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.45 in CN MODERN DAIRY on October 24, 2024 and sell it today you would earn a total of 0.55 from holding CN MODERN DAIRY or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. CN MODERN DAIRY
Performance |
| Timeline |
| Gaming and Leisure |
| CN MODERN DAIRY |
Gaming and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and CN MODERN
The main advantage of trading using opposite Gaming and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming 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.| Gaming vs. Soken Chemical Engineering | Gaming vs. Yanzhou Coal Mining | Gaming vs. SILICON LABORATOR | Gaming vs. Pembina Pipeline Corp |
| CN MODERN vs. CLEAN ENERGY FUELS | CN MODERN vs. PLAYTECH | CN MODERN vs. Ultra Clean Holdings | CN MODERN vs. Gaming and Leisure |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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