Correlation Between CNJ Capital and Dream Industrial

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Can any of the company-specific risk be diversified away by investing in both CNJ Capital and Dream Industrial 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 CNJ Capital and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNJ Capital Investments and Dream Industrial Real, you can compare the effects of market volatilities on CNJ Capital and Dream Industrial 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 CNJ Capital with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and Dream Industrial.

Diversification Opportunities for CNJ Capital and Dream Industrial

CNJDreamDiversified AwayCNJDreamDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CNJ and Dream is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital Investments and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and CNJ Capital 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 CNJ Capital Investments are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of CNJ Capital i.e., CNJ Capital and Dream Industrial go up and down completely randomly.

Pair Corralation between CNJ Capital and Dream Industrial

Assuming the 90 days trading horizon CNJ Capital Investments is expected to generate 4.29 times more return on investment than Dream Industrial. However, CNJ Capital is 4.29 times more volatile than Dream Industrial Real. It trades about 0.02 of its potential returns per unit of risk. Dream Industrial Real is currently generating about -0.01 per unit of risk. If you would invest  47.00  in CNJ Capital Investments on November 21, 2024 and sell it today you would lose (1.00) from holding CNJ Capital Investments or give up 2.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CNJ Capital Investments  vs.  Dream Industrial Real

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -12-10-8-6-4-202
JavaScript chart by amCharts 3.21.15CNJ-P DIR-UN
       Timeline  
CNJ Capital Investments 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CNJ Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CNJ Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.460.465
Dream Industrial Real 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Dream Industrial Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1111.51212.5

CNJ Capital and Dream Industrial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15CNJ-P DIR-UN
       Returns  

Pair Trading with CNJ Capital and Dream Industrial

The main advantage of trading using opposite CNJ Capital and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNJ Capital position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.
The idea behind CNJ Capital Investments and Dream Industrial Real pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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