Correlation Between A2 Milk and China Mengniu
Can any of the company-specific risk be diversified away by investing in both A2 Milk and China Mengniu 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 A2 Milk and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The A2 Milk and China Mengniu Dairy, you can compare the effects of market volatilities on A2 Milk and China Mengniu 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 A2 Milk with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2 Milk and China Mengniu.
Diversification Opportunities for A2 Milk and China Mengniu
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ACOPY and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The A2 Milk and China Mengniu Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mengniu Dairy and A2 Milk 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 The A2 Milk are associated (or correlated) with China Mengniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mengniu Dairy has no effect on the direction of A2 Milk i.e., A2 Milk and China Mengniu go up and down completely randomly.
Pair Corralation between A2 Milk and China Mengniu
Assuming the 90 days horizon The A2 Milk is expected to generate 0.94 times more return on investment than China Mengniu. However, The A2 Milk is 1.06 times less risky than China Mengniu. It trades about 0.01 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about -0.13 per unit of risk. If you would invest 370.00 in The A2 Milk on August 27, 2024 and sell it today you would lose (15.00) from holding The A2 Milk or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.04% |
| Values | Daily Returns |
The A2 Milk vs. China Mengniu Dairy
Performance |
| Timeline |
| A2 Milk |
| China Mengniu Dairy |
A2 Milk and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A2 Milk and China Mengniu
The main advantage of trading using opposite A2 Milk and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2 Milk position performs unexpectedly, China Mengniu 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 China Mengniu will offset losses from the drop in China Mengniu's long position.| A2 Milk vs. Avi Ltd ADR | A2 Milk vs. Altavoz Entertainment | A2 Milk vs. Aryzta AG PK | A2 Milk vs. Artisan Consumer Goods |
| China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. The A2 Milk | China Mengniu vs. BioAdaptives | China Mengniu vs. General Mills |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |