Correlation Between CSL and CN MODERN
Can any of the company-specific risk be diversified away by investing in both CSL and CN MODERN 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 CSL and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL LTD SPONADR and CN MODERN DAIRY, you can compare the effects of market volatilities on CSL and CN MODERN 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 CSL with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and CN MODERN.
Diversification Opportunities for CSL and CN MODERN
Very good diversification
The 3 months correlation between CSL and 07M is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CSL LTD SPONADR and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and CSL 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 CSL LTD SPONADR are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of CSL i.e., CSL and CN MODERN go up and down completely randomly.
Pair Corralation between CSL and CN MODERN
Assuming the 90 days trading horizon CSL LTD SPONADR is expected to under-perform the CN MODERN. In addition to that, CSL is 1.18 times more volatile than CN MODERN DAIRY. It trades about 0.0 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.01 per unit of volatility. If you would invest 9.25 in CN MODERN DAIRY on September 1, 2024 and sell it today you would earn a total of 0.00 from holding CN MODERN DAIRY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CSL LTD SPONADR vs. CN MODERN DAIRY
Performance |
| Timeline |
| CSL LTD SPONADR |
| CN MODERN DAIRY |
CSL and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and CN MODERN
The main advantage of trading using opposite CSL and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| CSL vs. Gaztransport Technigaz SA | CSL vs. TITANIUM TRANSPORTGROUP | CSL vs. Transportadora de Gas | CSL vs. AUSTEVOLL SEAFOOD |
| CN MODERN vs. Fast Retailing Co | CN MODERN vs. National Retail Properties | CN MODERN vs. AAC TECHNOLOGHLDGADR | CN MODERN vs. GLG LIFE TECH |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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