Correlation Between Aryzta AG and China Feihe
Can any of the company-specific risk be diversified away by investing in both Aryzta AG and China Feihe 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 Aryzta AG and China Feihe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aryzta AG PK and China Feihe Limited, you can compare the effects of market volatilities on Aryzta AG and China Feihe 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 Aryzta AG with a short position of China Feihe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aryzta AG and China Feihe.
Diversification Opportunities for Aryzta AG and China Feihe
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aryzta and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and China Feihe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Feihe Limited and Aryzta AG 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 Aryzta AG PK are associated (or correlated) with China Feihe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Feihe Limited has no effect on the direction of Aryzta AG i.e., Aryzta AG and China Feihe go up and down completely randomly.
Pair Corralation between Aryzta AG and China Feihe
Assuming the 90 days horizon Aryzta AG PK is expected to generate 0.71 times more return on investment than China Feihe. However, Aryzta AG PK is 1.4 times less risky than China Feihe. It trades about -0.12 of its potential returns per unit of risk. China Feihe Limited is currently generating about -0.18 per unit of risk. If you would invest 90.00 in Aryzta AG PK on September 2, 2024 and sell it today you would lose (7.00) from holding Aryzta AG PK or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aryzta AG PK vs. China Feihe Limited
Performance |
| Timeline |
| Aryzta AG PK |
| China Feihe Limited |
Aryzta AG and China Feihe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aryzta AG and China Feihe
The main advantage of trading using opposite Aryzta AG and China Feihe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aryzta AG position performs unexpectedly, China Feihe 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 Feihe will offset losses from the drop in China Feihe's long position.| Aryzta AG vs. Artisan Consumer Goods | Aryzta AG vs. Altavoz Entertainment | Aryzta AG vs. Avi Ltd ADR | Aryzta AG vs. The a2 Milk |
| China Feihe vs. WH Group Limited | China Feihe vs. BG Foods | China Feihe vs. JBS SA | China Feihe vs. Marfrig Global Foods |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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