Correlation Between Event Hospitality and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Event Hospitality 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 Event Hospitality and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Event Hospitality and and CN MODERN DAIRY, you can compare the effects of market volatilities on Event Hospitality 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 Event Hospitality with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Event Hospitality and CN MODERN.
Diversification Opportunities for Event Hospitality and CN MODERN
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Event and 07M is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and 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 Event Hospitality 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 Event Hospitality and 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 Event Hospitality i.e., Event Hospitality and CN MODERN go up and down completely randomly.
Pair Corralation between Event Hospitality and CN MODERN
Assuming the 90 days trading horizon Event Hospitality and is expected to generate 0.75 times more return on investment than CN MODERN. However, Event Hospitality and is 1.33 times less risky than CN MODERN. It trades about 0.14 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.07 per unit of risk. If you would invest 645.00 in Event Hospitality and on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Event Hospitality and or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Event Hospitality and vs. CN MODERN DAIRY
Performance |
| Timeline |
| Event Hospitality |
| CN MODERN DAIRY |
Event Hospitality and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Event Hospitality and CN MODERN
The main advantage of trading using opposite Event Hospitality and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Event Hospitality 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.| Event Hospitality vs. CN MODERN DAIRY | Event Hospitality vs. National Beverage Corp | Event Hospitality vs. Tyson Foods | Event Hospitality vs. Verizon Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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