Correlation Between CN MODERN and SCANDMEDICAL SOLDK-040

Can any of the company-specific risk be diversified away by investing in both CN MODERN and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on CN MODERN and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and SCANDMEDICAL SOLDK-040.

Diversification Opportunities for CN MODERN and SCANDMEDICAL SOLDK-040

-0.52

Correlation Coefficient

CN MODERN  SCANDMEDICAL SOLDK-040

Excellent diversification

The 3 months correlation between 07M and SCANDMEDICAL is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of CN MODERN i.e., CN MODERN and SCANDMEDICAL SOLDK-040 go up and down completely randomly.

Pair Corralation between CN MODERN and SCANDMEDICAL SOLDK-040

Assuming the 90 days trading horizon CN MODERN is expected to generate 10.2 times less return on investment than SCANDMEDICAL SOLDK-040. But when comparing it to its historical volatility, CN MODERN DAIRY is 2.82 times less risky than SCANDMEDICAL SOLDK-040. It trades about 0.01 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  101.00  in SCANDMEDICAL SOLDK 040 on October 24, 2024 and sell it today you would lose (30.00) from holding SCANDMEDICAL SOLDK 040 or give up 29.7% of portfolio value over 90 days.

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

CN MODERN DAIRY  vs.  SCANDMEDICAL SOLDK 040

CN MODERN DAIRY

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CN MODERN DAIRY are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, CN MODERN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CN MODERN and SCANDMEDICAL SOLDK-040

The main advantage of trading using opposite CN MODERN and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.

The idea behind CN MODERN DAIRY and SCANDMEDICAL SOLDK 040 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..