Correlation Between CDL INVESTMENT and NN Group
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and NN Group 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 CDL INVESTMENT and NN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and NN Group NV, you can compare the effects of market volatilities on CDL INVESTMENT and NN Group 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 CDL INVESTMENT with a short position of NN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and NN Group.
Diversification Opportunities for CDL INVESTMENT and NN Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDL and 2NN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and NN Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Group NV and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with NN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Group NV has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and NN Group go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and NN Group
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 1.6 times more return on investment than NN Group. However, CDL INVESTMENT is 1.6 times more volatile than NN Group NV. It trades about 0.09 of its potential returns per unit of risk. NN Group NV is currently generating about -0.15 per unit of risk. If you would invest 42.00 in CDL INVESTMENT on October 9, 2024 and sell it today you would earn a total of 2.00 from holding CDL INVESTMENT or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
CDL INVESTMENT vs. NN Group NV
Performance |
| Timeline |
| CDL INVESTMENT |
| NN Group NV |
CDL INVESTMENT and NN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and NN Group
The main advantage of trading using opposite CDL INVESTMENT and NN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, NN Group 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 NN Group will offset losses from the drop in NN Group's long position.| CDL INVESTMENT vs. Casio Computer CoLtd | CDL INVESTMENT vs. De Grey Mining | CDL INVESTMENT vs. Zoom Video Communications | CDL INVESTMENT vs. Harmony Gold Mining |
| NN Group vs. Forsys Metals Corp | NN Group vs. Yuexiu Transport Infrastructure | NN Group vs. Fortescue Metals Group | NN Group vs. Ross Stores |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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