Correlation Between CME and DATA MODUL
Can any of the company-specific risk be diversified away by investing in both CME and DATA MODUL 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 CME and DATA MODUL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CME Group and DATA MODUL , you can compare the effects of market volatilities on CME and DATA MODUL 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 CME with a short position of DATA MODUL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CME and DATA MODUL.
Diversification Opportunities for CME and DATA MODUL
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CME and DATA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CME Group and DATA MODUL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATA MODUL and CME 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 CME Group are associated (or correlated) with DATA MODUL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATA MODUL has no effect on the direction of CME i.e., CME and DATA MODUL go up and down completely randomly.
Pair Corralation between CME and DATA MODUL
Assuming the 90 days trading horizon CME Group is expected to generate 0.69 times more return on investment than DATA MODUL. However, CME Group is 1.45 times less risky than DATA MODUL. It trades about 0.11 of its potential returns per unit of risk. DATA MODUL is currently generating about -0.08 per unit of risk. If you would invest 20,458 in CME Group on October 26, 2024 and sell it today you would earn a total of 1,937 from holding CME Group or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
CME Group vs. DATA MODUL
Performance |
| Timeline |
| CME Group |
| DATA MODUL |
CME and DATA MODUL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CME and DATA MODUL
The main advantage of trading using opposite CME and DATA MODUL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CME position performs unexpectedly, DATA MODUL 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 DATA MODUL will offset losses from the drop in DATA MODUL's long position.| CME vs. United Airlines Holdings | CME vs. OPKO HEALTH | CME vs. EPSILON HEALTHCARE LTD | CME vs. National Health Investors |
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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