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
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACOPY and China is 0.31. 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 0.92 times more return on investment than China Mengniu. However, The A2 Milk is 1.08 times less risky than China Mengniu. It trades about 0.0 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about -0.03 per unit of risk. If you would invest 425.00 in The A2 Milk on August 30, 2024 and sell it today you would lose (70.00) from holding The A2 Milk or give up 16.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| 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. The a2 Milk | A2 Milk vs. Aryzta AG PK |
| China Mengniu vs. Nestle SA ADR | China Mengniu vs. ConAgra Foods | China Mengniu vs. Hormel Foods | China Mengniu vs. Kraft Heinz Co |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |