Correlation Between South Pacific and CNJ Capital
Can any of the company-specific risk be diversified away by investing in both South Pacific and CNJ Capital 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 South Pacific and CNJ Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Pacific Metals and CNJ Capital Investments, you can compare the effects of market volatilities on South Pacific and CNJ Capital 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 South Pacific with a short position of CNJ Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Pacific and CNJ Capital.
Diversification Opportunities for South Pacific and CNJ Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between South and CNJ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding South Pacific Metals and CNJ Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNJ Capital Investments and South Pacific 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 South Pacific Metals are associated (or correlated) with CNJ Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNJ Capital Investments has no effect on the direction of South Pacific i.e., South Pacific and CNJ Capital go up and down completely randomly.
Pair Corralation between South Pacific and CNJ Capital
Assuming the 90 days trading horizon South Pacific is expected to generate 1.16 times less return on investment than CNJ Capital. In addition to that, South Pacific is 2.03 times more volatile than CNJ Capital Investments. It trades about 0.03 of its total potential returns per unit of risk. CNJ Capital Investments is currently generating about 0.08 per unit of volatility. If you would invest 15.00 in CNJ Capital Investments on October 13, 2024 and sell it today you would earn a total of 31.00 from holding CNJ Capital Investments or generate 206.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 78.63% |
| Values | Daily Returns |
South Pacific Metals vs. CNJ Capital Investments
Performance |
| Timeline |
| South Pacific Metals |
| CNJ Capital Investments |
South Pacific and CNJ Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Pacific and CNJ Capital
The main advantage of trading using opposite South Pacific and CNJ Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Pacific position performs unexpectedly, CNJ Capital 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 CNJ Capital will offset losses from the drop in CNJ Capital's long position.| South Pacific vs. CVW CleanTech | South Pacific vs. 2028 Investment Grade | South Pacific vs. Jamieson Wellness | South Pacific vs. Air Canada |
| CNJ Capital vs. Richelieu Hardware | CNJ Capital vs. South Pacific Metals | CNJ Capital vs. AKITA Drilling | CNJ Capital vs. Major Drilling Group |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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