Correlation Between CochLear and GN Store
Can any of the company-specific risk be diversified away by investing in both CochLear and GN Store 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 CochLear and GN Store into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CochLear Ltd ADR and GN Store Nord, you can compare the effects of market volatilities on CochLear and GN Store 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 CochLear with a short position of GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of CochLear and GN Store.
Diversification Opportunities for CochLear and GN Store
Modest diversification
The 3 months correlation between CochLear and GNNDY is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CochLear Ltd ADR and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord and CochLear 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 CochLear Ltd ADR are associated (or correlated) with GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of CochLear i.e., CochLear and GN Store go up and down completely randomly.
Pair Corralation between CochLear and GN Store
Assuming the 90 days horizon CochLear Ltd ADR is expected to generate 0.74 times more return on investment than GN Store. However, CochLear Ltd ADR is 1.35 times less risky than GN Store. It trades about 0.24 of its potential returns per unit of risk. GN Store Nord is currently generating about -0.06 per unit of risk. If you would invest 9,333 in CochLear Ltd ADR on August 30, 2024 and sell it today you would earn a total of 656.00 from holding CochLear Ltd ADR or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CochLear Ltd ADR vs. GN Store Nord
Performance |
| Timeline |
| CochLear ADR |
| GN Store Nord |
CochLear and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CochLear and GN Store
The main advantage of trading using opposite CochLear and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CochLear position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store's long position.| CochLear vs. Smith Nephew SNATS | CochLear vs. Integer Holdings Corp | CochLear vs. Demant AS ADR | CochLear vs. GN Store Nord |
| GN Store vs. Demant AS ADR | GN Store vs. Sonova Holding AG | GN Store vs. GN Store Nord | GN Store vs. Bone Biologics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
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