Correlation Between COFCO Joycome and MERCEDES-BENZ GRP
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and MERCEDES-BENZ GRP 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 COFCO Joycome and MERCEDES-BENZ GRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and MERCEDES BENZ GRP ADR14, you can compare the effects of market volatilities on COFCO Joycome and MERCEDES-BENZ GRP 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 COFCO Joycome with a short position of MERCEDES-BENZ GRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and MERCEDES-BENZ GRP.
Diversification Opportunities for COFCO Joycome and MERCEDES-BENZ GRP
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between COFCO and MERCEDES-BENZ is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and MERCEDES BENZ GRP ADR14 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MERCEDES BENZ GRP and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with MERCEDES-BENZ GRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MERCEDES BENZ GRP has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and MERCEDES-BENZ GRP go up and down completely randomly.
Pair Corralation between COFCO Joycome and MERCEDES-BENZ GRP
Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 1.45 times more return on investment than MERCEDES-BENZ GRP. However, COFCO Joycome is 1.45 times more volatile than MERCEDES BENZ GRP ADR14. It trades about 0.09 of its potential returns per unit of risk. MERCEDES BENZ GRP ADR14 is currently generating about 0.07 per unit of risk. If you would invest 17.00 in COFCO Joycome Foods on September 13, 2024 and sell it today you would earn a total of 1.00 from holding COFCO Joycome Foods or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. MERCEDES BENZ GRP ADR14
Performance |
| Timeline |
| COFCO Joycome Foods |
| MERCEDES BENZ GRP |
COFCO Joycome and MERCEDES-BENZ GRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and MERCEDES-BENZ GRP
The main advantage of trading using opposite COFCO Joycome and MERCEDES-BENZ GRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, MERCEDES-BENZ GRP 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 MERCEDES-BENZ GRP will offset losses from the drop in MERCEDES-BENZ GRP's long position.| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
| MERCEDES-BENZ GRP vs. BYD Company Limited | MERCEDES-BENZ GRP vs. Superior Plus Corp | MERCEDES-BENZ GRP vs. SIVERS SEMICONDUCTORS AB | MERCEDES-BENZ GRP vs. NorAm Drilling AS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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