Correlation Between CNJ Capital and North American
Can any of the company-specific risk be diversified away by investing in both CNJ Capital and North American 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 North American 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 North American Construction, you can compare the effects of market volatilities on CNJ Capital and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and North American.
Diversification Opportunities for CNJ Capital and North American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNJ and North is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital Investments and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of CNJ Capital i.e., CNJ Capital and North American go up and down completely randomly.
Pair Corralation between CNJ Capital and North American
Assuming the 90 days trading horizon CNJ Capital Investments is expected to generate 2.07 times more return on investment than North American. However, CNJ Capital is 2.07 times more volatile than North American Construction. It trades about 0.08 of its potential returns per unit of risk. North American Construction is currently generating about 0.05 per unit of risk. If you would invest 15.00 in CNJ Capital Investments on September 1, 2024 and sell it today you would earn a total of 31.00 from holding CNJ Capital Investments or generate 206.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 73.13% |
| Values | Daily Returns |
CNJ Capital Investments vs. North American Construction
Performance |
| Timeline |
| CNJ Capital Investments |
| North American Const |
CNJ Capital and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNJ Capital and North American
The main advantage of trading using opposite CNJ Capital and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNJ Capital position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| CNJ Capital vs. NovaGold Resources | CNJ Capital vs. HPQ Silicon Resources | CNJ Capital vs. Eastwood Bio Medical Canada | CNJ Capital vs. Diamond Fields Resources |
| North American vs. PHX Energy Services | North American vs. CES Energy Solutions | North American vs. Total Energy Services | North American vs. Pason Systems |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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