Correlation Between CN MODERN and MONGOLIAN MINING

Can any of the company-specific risk be diversified away by investing in both CN MODERN and MONGOLIAN MINING 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 CN MODERN and MONGOLIAN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CN MODERN DAIRY and MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on CN MODERN and MONGOLIAN MINING 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 CN MODERN with a short position of MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and MONGOLIAN MINING.

Diversification Opportunities for CN MODERN and MONGOLIAN MINING

-0.49

Correlation Coefficient

CN MODERN  MONGOLIAN MINING

Very good diversification

The 3 months correlation between 07M and MONGOLIAN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of CN MODERN i.e., CN MODERN and MONGOLIAN MINING go up and down completely randomly.

Pair Corralation between CN MODERN and MONGOLIAN MINING

Assuming the 90 days trading horizon CN MODERN is expected to generate 2.65 times less return on investment than MONGOLIAN MINING. In addition to that, CN MODERN is 1.28 times more volatile than MONGOLIAN MINING CRPREGS. It trades about 0.02 of its total potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about 0.06 per unit of volatility. If you would invest  86.00  in MONGOLIAN MINING CRPREGS on October 25, 2024 and sell it today you would earn a total of  2.00  from holding MONGOLIAN MINING CRPREGS or generate 2.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CN MODERN DAIRY  vs.  MONGOLIAN MINING CRPREGS

CN MODERN DAIRY

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CN MODERN DAIRY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, CN MODERN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MONGOLIAN MINING CRPREGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CN MODERN and MONGOLIAN MINING

The main advantage of trading using opposite CN MODERN and MONGOLIAN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, MONGOLIAN MINING 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 MONGOLIAN MINING will offset losses from the drop in MONGOLIAN MINING's long position.

The idea behind CN MODERN DAIRY and MONGOLIAN MINING CRPREGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.