Correlation Between Alfa Financial and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and CN MODERN DAIRY, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and CN MODERN.
Diversification Opportunities for Alfa Financial and CN MODERN
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alfa and 07M is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and CN MODERN go up and down completely randomly.
Pair Corralation between Alfa Financial and CN MODERN
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the CN MODERN. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Financial Software is 1.91 times less risky than CN MODERN. The stock trades about -0.03 of its potential returns per unit of risk. The CN MODERN DAIRY is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 10.00 in CN MODERN DAIRY on October 10, 2024 and sell it today you would lose (0.10) from holding CN MODERN DAIRY or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. CN MODERN DAIRY
Performance |
| Timeline |
| Alfa Financial Software |
| CN MODERN DAIRY |
Alfa Financial and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and CN MODERN
The main advantage of trading using opposite Alfa Financial and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Harmony Gold Mining | Alfa Financial vs. JLF INVESTMENT | Alfa Financial vs. Eurasia Mining Plc | Alfa Financial vs. De Grey Mining |
| CN MODERN vs. ALTAIR RES INC | CN MODERN vs. The Hanover Insurance | CN MODERN vs. Direct Line Insurance | CN MODERN vs. REVO INSURANCE SPA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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