Correlation Between CM AM and Azvalor Global

Can any of the company-specific risk be diversified away by investing in both CM AM and Azvalor Global 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 CM AM and Azvalor Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CM AM Monplus NE and Azvalor Global Value, you can compare the effects of market volatilities on CM AM and Azvalor Global 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 CM AM with a short position of Azvalor Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM AM and Azvalor Global.

Diversification Opportunities for CM AM and Azvalor Global

-0.51

Correlation Coefficient

CM AM  Azvalor Global

Excellent diversification

The 3 months correlation between 0P0001F96C and Azvalor is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CM AM Monplus NE and Azvalor Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azvalor Global Value and CM AM 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 CM AM Monplus NE are associated (or correlated) with Azvalor Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azvalor Global Value has no effect on the direction of CM AM i.e., CM AM and Azvalor Global go up and down completely randomly.

Pair Corralation between CM AM and Azvalor Global

Assuming the 90 days trading horizon CM AM Monplus NE is expected to generate 0.01 times more return on investment than Azvalor Global. However, CM AM Monplus NE is 79.34 times less risky than Azvalor Global. It trades about 1.35 of its potential returns per unit of risk. Azvalor Global Value is currently generating about -0.02 per unit of risk. If you would invest  10,572  in CM AM Monplus NE on October 24, 2024 and sell it today you would earn a total of  83.00  from holding CM AM Monplus NE or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

CM AM Monplus NE  vs.  Azvalor Global Value

CM AM Monplus

Risk-Adjusted Performance

96 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in CM AM Monplus NE are ranked lower than 96 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, CM AM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Azvalor Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azvalor Global Value has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Azvalor Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CM AM and Azvalor Global

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

The idea behind CM AM Monplus NE and Azvalor Global Value 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.