Correlation Between Fevertree Drinks and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks PLC and CN MODERN DAIRY, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and CN MODERN.
Diversification Opportunities for Fevertree Drinks and CN MODERN
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fevertree and 07M is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC 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 Fevertree Drinks 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 Fevertree Drinks PLC 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 Fevertree Drinks i.e., Fevertree Drinks and CN MODERN go up and down completely randomly.
Pair Corralation between Fevertree Drinks and CN MODERN
Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to under-perform the CN MODERN. But the stock apears to be less risky and, when comparing its historical volatility, Fevertree Drinks PLC is 1.09 times less risky than CN MODERN. The stock trades about -0.02 of its potential returns per unit of risk. The CN MODERN DAIRY is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9.19 in CN MODERN DAIRY on August 29, 2024 and sell it today you would earn a total of 0.11 from holding CN MODERN DAIRY or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks PLC vs. CN MODERN DAIRY
Performance |
| Timeline |
| Fevertree Drinks PLC |
| CN MODERN DAIRY |
Fevertree Drinks and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and CN MODERN
The main advantage of trading using opposite Fevertree Drinks and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc |
| CN MODERN vs. Apple Inc | CN MODERN vs. Apple Inc | CN MODERN vs. Superior Plus Corp | CN MODERN vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |