Correlation Between CN MODERN and Apple

Can any of the company-specific risk be diversified away by investing in both CN MODERN and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on CN MODERN and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Apple.

Diversification Opportunities for CN MODERN and Apple

0.65

Correlation Coefficient

CN MODERN  Apple

Poor diversification

The 3 months correlation between 07M and Apple is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CN MODERN i.e., CN MODERN and Apple go up and down completely randomly.

Pair Corralation between CN MODERN and Apple

Assuming the 90 days trading horizon CN MODERN DAIRY is expected to under-perform the Apple. In addition to that, CN MODERN is 3.08 times more volatile than Apple Inc. It trades about -0.16 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.32 per unit of volatility. If you would invest  24,145  in Apple Inc on October 20, 2024 and sell it today you would lose (1,810) from holding Apple Inc or give up 7.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CN MODERN DAIRY  vs.  Apple Inc

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.

Apple Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CN MODERN and Apple

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

The idea behind CN MODERN DAIRY and Apple Inc 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.