Correlation Between CP ALL and Minor International

Can any of the company-specific risk be diversified away by investing in both CP ALL and Minor International 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 CP ALL and Minor International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CP ALL Public and Minor International Public, you can compare the effects of market volatilities on CP ALL and Minor International 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 CP ALL with a short position of Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Minor International.

Diversification Opportunities for CP ALL and Minor International

0.23

Correlation Coefficient

CP ALL  Minor International

Modest diversification

The 3 months correlation between CPALL and Minor is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Minor International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International and CP ALL 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 CP ALL Public are associated (or correlated) with Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International has no effect on the direction of CP ALL i.e., CP ALL and Minor International go up and down completely randomly.

Pair Corralation between CP ALL and Minor International

Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Minor International. In addition to that, CP ALL is 1.58 times more volatile than Minor International Public. It trades about -0.06 of its total potential returns per unit of risk. Minor International Public is currently generating about 0.09 per unit of volatility. If you would invest  2,675  in Minor International Public on November 29, 2024 and sell it today you would earn a total of  225.00  from holding Minor International Public or generate 8.41% return on investment over 90 days.

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

CP ALL Public  vs.  Minor International Public

CP ALL Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Minor International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minor International Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Minor International may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with CP ALL and Minor International

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

The idea behind CP ALL Public and Minor International Public 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.