Correlation Between Barry Callebaut and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Barry Callebaut 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 Barry Callebaut and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barry Callebaut AG and China Mengniu Dairy, you can compare the effects of market volatilities on Barry Callebaut 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 Barry Callebaut with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barry Callebaut and China Mengniu.
Diversification Opportunities for Barry Callebaut and China Mengniu
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barry and China is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barry Callebaut AG 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 Barry Callebaut 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 Barry Callebaut AG 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 Barry Callebaut i.e., Barry Callebaut and China Mengniu go up and down completely randomly.
Pair Corralation between Barry Callebaut and China Mengniu
Assuming the 90 days horizon Barry Callebaut AG is expected to under-perform the China Mengniu. In addition to that, Barry Callebaut is 1.41 times more volatile than China Mengniu Dairy. It trades about -0.27 of its total potential returns per unit of risk. China Mengniu Dairy is currently generating about 0.15 per unit of volatility. If you would invest 2,119 in China Mengniu Dairy on September 15, 2024 and sell it today you would earn a total of 193.00 from holding China Mengniu Dairy or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barry Callebaut AG vs. China Mengniu Dairy
Performance |
| Timeline |
| Barry Callebaut AG |
| China Mengniu Dairy |
Barry Callebaut and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barry Callebaut and China Mengniu
The main advantage of trading using opposite Barry Callebaut and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barry Callebaut 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.| Barry Callebaut vs. Hershey Co | Barry Callebaut vs. Mondelez International | Barry Callebaut vs. Chocoladefabriken Lindt Sprngli | Barry Callebaut vs. Bunzl plc |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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