Correlation Between CNVISION MEDIA and Food Life
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA and Food Life 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 CNVISION MEDIA and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and Food Life Companies, you can compare the effects of market volatilities on CNVISION MEDIA and Food Life 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 CNVISION MEDIA with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Food Life.
Diversification Opportunities for CNVISION MEDIA and Food Life
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNVISION and Food is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and CNVISION MEDIA 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 CNVISION MEDIA are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and Food Life go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and Food Life
Assuming the 90 days trading horizon CNVISION MEDIA is expected to under-perform the Food Life. In addition to that, CNVISION MEDIA is 1.18 times more volatile than Food Life Companies. It trades about -0.18 of its total potential returns per unit of risk. Food Life Companies is currently generating about 0.32 per unit of volatility. If you would invest 1,770 in Food Life Companies on August 30, 2024 and sell it today you would earn a total of 270.00 from holding Food Life Companies or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. Food Life Companies
Performance |
| Timeline |
| CNVISION MEDIA |
| Food Life Companies |
CNVISION MEDIA and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and Food Life
The main advantage of trading using opposite CNVISION MEDIA and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Superior Plus Corp | CNVISION MEDIA vs. SIVERS SEMICONDUCTORS AB |
| Food Life vs. Yum China Holdings | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. Talanx AG |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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