Correlation Between CNJ Capital and Sirona Biochem

Can any of the company-specific risk be diversified away by investing in both CNJ Capital and Sirona Biochem 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 CNJ Capital and Sirona Biochem into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CNJ Capital Investments and Sirona Biochem Corp, you can compare the effects of market volatilities on CNJ Capital and Sirona Biochem 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 CNJ Capital with a short position of Sirona Biochem. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and Sirona Biochem.

Diversification Opportunities for CNJ Capital and Sirona Biochem

0.0

Correlation Coefficient

CNJ Capital  Sirona Biochem

Pay attention - limited upside

The 3 months correlation between CNJ and Sirona is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital Investments and Sirona Biochem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirona Biochem Corp and CNJ Capital 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 CNJ Capital Investments are associated (or correlated) with Sirona Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirona Biochem Corp has no effect on the direction of CNJ Capital i.e., CNJ Capital and Sirona Biochem go up and down completely randomly.

Pair Corralation between CNJ Capital and Sirona Biochem

Assuming the 90 days trading horizon CNJ Capital Investments is expected to generate 0.44 times more return on investment than Sirona Biochem. However, CNJ Capital Investments is 2.28 times less risky than Sirona Biochem. It trades about 0.08 of its potential returns per unit of risk. Sirona Biochem Corp is currently generating about 0.04 per unit of risk. If you would invest  15.00  in CNJ Capital Investments on October 22, 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	79.8%
Values	Daily Returns

CNJ Capital Investments  vs.  Sirona Biochem Corp

CNJ Capital Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNJ Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CNJ Capital is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sirona Biochem Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sirona Biochem Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sirona Biochem is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CNJ Capital and Sirona Biochem

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

The idea behind CNJ Capital Investments and Sirona Biochem Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.