Correlation Between Laureate Education and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Laureate Education 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 Laureate Education and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and CN MODERN DAIRY, you can compare the effects of market volatilities on Laureate Education 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 Laureate Education with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and CN MODERN.
Diversification Opportunities for Laureate Education and CN MODERN
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Laureate and 07M is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education 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 Laureate Education 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 Laureate Education 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 Laureate Education i.e., Laureate Education and CN MODERN go up and down completely randomly.
Pair Corralation between Laureate Education and CN MODERN
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.34 times more return on investment than CN MODERN. However, Laureate Education is 2.95 times less risky than CN MODERN. It trades about 0.12 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about -0.16 per unit of risk. If you would invest 1,770 in Laureate Education on October 20, 2024 and sell it today you would earn a total of 50.00 from holding Laureate Education or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. CN MODERN DAIRY
Performance |
| Timeline |
| Laureate Education |
| CN MODERN DAIRY |
Laureate Education and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and CN MODERN
The main advantage of trading using opposite Laureate Education and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education 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.| Laureate Education vs. IMPERIAL TOBACCO | Laureate Education vs. Jacquet Metal Service | Laureate Education vs. JIAHUA STORES | Laureate Education vs. Japan Tobacco |
| CN MODERN vs. REVO INSURANCE SPA | CN MODERN vs. SENECA FOODS A | CN MODERN vs. Cal Maine Foods | CN MODERN vs. UNIQA INSURANCE GR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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