Correlation Between Minor International and CP ALL

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

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

Diversification Opportunities for Minor International and CP ALL

0.33

Correlation Coefficient

Minor International  CP ALL

Weak diversification

The 3 months correlation between Minor and CPALL is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and Minor International 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 Minor International Public are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Minor International i.e., Minor International and CP ALL go up and down completely randomly.

Pair Corralation between Minor International and CP ALL

Assuming the 90 days trading horizon Minor International Public is expected to under-perform the CP ALL. But the stock apears to be less risky and, when comparing its historical volatility, Minor International Public is 1.07 times less risky than CP ALL. The stock trades about -0.1 of its potential returns per unit of risk. The CP ALL Public is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  5,578  in CP ALL Public on February 28, 2024 and sell it today you would earn a total of  297.00  from holding CP ALL Public or generate 5.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Minor International Public  vs.  CP ALL Public

Minor International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Minor International Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Minor International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

CP ALL Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CP ALL Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, CP ALL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Minor International and CP ALL

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

The idea behind Minor International Public and CP ALL 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.