Correlation Between Natural Alternatives and CIMG
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives and CIMG 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 Natural Alternatives and CIMG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and CIMG Inc, you can compare the effects of market volatilities on Natural Alternatives and CIMG 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 Natural Alternatives with a short position of CIMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and CIMG.
Diversification Opportunities for Natural Alternatives and CIMG
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natural and CIMG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and CIMG go up and down completely randomly.
Pair Corralation between Natural Alternatives and CIMG
Given the investment horizon of 90 days Natural Alternatives International is expected to generate 0.21 times more return on investment than CIMG. However, Natural Alternatives International is 4.86 times less risky than CIMG. It trades about -0.09 of its potential returns per unit of risk. CIMG Inc is currently generating about -0.11 per unit of risk. If you would invest 453.00 in Natural Alternatives International on August 28, 2024 and sell it today you would lose (22.00) from holding Natural Alternatives International or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. CIMG Inc
Performance |
| Timeline |
| Natural Alternatives |
| CIMG Inc |
Natural Alternatives and CIMG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and CIMG
The main advantage of trading using opposite Natural Alternatives and CIMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives position performs unexpectedly, CIMG 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 CIMG will offset losses from the drop in CIMG's long position.| Natural Alternatives vs. FitLife Brands, Common | Natural Alternatives vs. Lifeway Foods | Natural Alternatives vs. Else Nutrition Holdings | Natural Alternatives vs. Central Garden Pet |
| CIMG vs. RLX Technology | CIMG vs. First Ship Lease | CIMG vs. Willamette Valley Vineyards | CIMG vs. Keurig Dr Pepper |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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