Correlation Between CNJ Capital and Homerun Resources
Can any of the company-specific risk be diversified away by investing in both CNJ Capital and Homerun Resources 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 Homerun Resources 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 Homerun Resources, you can compare the effects of market volatilities on CNJ Capital and Homerun Resources 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 Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and Homerun Resources.
Diversification Opportunities for CNJ Capital and Homerun Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNJ and Homerun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital Investments and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun Resources 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of CNJ Capital i.e., CNJ Capital and Homerun Resources go up and down completely randomly.
Pair Corralation between CNJ Capital and Homerun Resources
Assuming the 90 days trading horizon CNJ Capital is expected to generate 1.79 times less return on investment than Homerun Resources. But when comparing it to its historical volatility, CNJ Capital Investments is 1.37 times less risky than Homerun Resources. It trades about 0.08 of its potential returns per unit of risk. Homerun Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Homerun Resources on October 13, 2024 and sell it today you would earn a total of 109.00 from holding Homerun Resources or generate 990.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.63% |
| Values | Daily Returns |
CNJ Capital Investments vs. Homerun Resources
Performance |
| Timeline |
| CNJ Capital Investments |
| Homerun Resources |
CNJ Capital and Homerun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNJ Capital and Homerun Resources
The main advantage of trading using opposite CNJ Capital and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNJ Capital position performs unexpectedly, Homerun Resources 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 Homerun Resources will offset losses from the drop in Homerun Resources' long position.| CNJ Capital vs. Richelieu Hardware | CNJ Capital vs. South Pacific Metals | CNJ Capital vs. AKITA Drilling | CNJ Capital vs. Major Drilling Group |
| Homerun Resources vs. CNJ Capital Investments | Homerun Resources vs. Diversified Royalty Corp | Homerun Resources vs. BluMetric Environmental | Homerun Resources vs. Quorum Information Technologies |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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