Correlation Between Artisan Consumer and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Artisan Consumer 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 Artisan Consumer and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Consumer Goods and China Mengniu Dairy, you can compare the effects of market volatilities on Artisan Consumer 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 Artisan Consumer with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Consumer and China Mengniu.
Diversification Opportunities for Artisan Consumer and China Mengniu
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Artisan and China is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Consumer Goods 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 Artisan Consumer 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 Artisan Consumer Goods 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 Artisan Consumer i.e., Artisan Consumer and China Mengniu go up and down completely randomly.
Pair Corralation between Artisan Consumer and China Mengniu
Given the investment horizon of 90 days Artisan Consumer Goods is expected to under-perform the China Mengniu. In addition to that, Artisan Consumer is 1.65 times more volatile than China Mengniu Dairy. It trades about -0.21 of its total potential returns per unit of risk. China Mengniu Dairy is currently generating about 0.03 per unit of volatility. If you would invest 2,177 in China Mengniu Dairy on August 30, 2024 and sell it today you would earn a total of 25.00 from holding China Mengniu Dairy or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Consumer Goods vs. China Mengniu Dairy
Performance |
| Timeline |
| Artisan Consumer Goods |
| China Mengniu Dairy |
Artisan Consumer and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Consumer and China Mengniu
The main advantage of trading using opposite Artisan Consumer and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Consumer 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.| Artisan Consumer vs. Silver Hammer Mining | Artisan Consumer vs. Reyna Silver Corp | Artisan Consumer vs. Guanajuato Silver | Artisan Consumer vs. Silver One Resources |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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