Correlation Between CU Tech and Nature
Can any of the company-specific risk be diversified away by investing in both CU Tech and Nature 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 CU Tech and Nature into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Nature and Environment, you can compare the effects of market volatilities on CU Tech and Nature 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 CU Tech with a short position of Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Nature.
Diversification Opportunities for CU Tech and Nature
Very weak diversification
The 3 months correlation between 376290 and Nature is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment and CU Tech 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 CU Tech Corp are associated (or correlated) with Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of CU Tech i.e., CU Tech and Nature go up and down completely randomly.
Pair Corralation between CU Tech and Nature
Assuming the 90 days trading horizon CU Tech Corp is expected to generate 0.78 times more return on investment than Nature. However, CU Tech Corp is 1.28 times less risky than Nature. It trades about 0.07 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.19 per unit of risk. If you would invest 295,500 in CU Tech Corp on October 17, 2024 and sell it today you would earn a total of 4,500 from holding CU Tech Corp or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Tech Corp vs. Nature and Environment
Performance |
| Timeline |
| CU Tech Corp |
| Nature and Environment |
CU Tech and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Nature
The main advantage of trading using opposite CU Tech and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| CU Tech vs. iNtRON Biotechnology | CU Tech vs. Korean Drug Co | CU Tech vs. Nable Communications | CU Tech vs. Youngsin Metal Industrial |
| Nature vs. Hwangkum Steel Technology | Nature vs. Orbitech Co | Nature vs. Raontech | Nature vs. CU Tech Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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