Correlation Between China Feihe and Grupo Herdez
Can any of the company-specific risk be diversified away by investing in both China Feihe and Grupo Herdez 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 China Feihe and Grupo Herdez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Feihe Limited and Grupo Herdez SAB, you can compare the effects of market volatilities on China Feihe and Grupo Herdez 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 China Feihe with a short position of Grupo Herdez. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Feihe and Grupo Herdez.
Diversification Opportunities for China Feihe and Grupo Herdez
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Grupo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Feihe Limited and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez SAB and China Feihe 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 China Feihe Limited are associated (or correlated) with Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of China Feihe i.e., China Feihe and Grupo Herdez go up and down completely randomly.
Pair Corralation between China Feihe and Grupo Herdez
Assuming the 90 days horizon China Feihe Limited is expected to generate 7.66 times more return on investment than Grupo Herdez. However, China Feihe is 7.66 times more volatile than Grupo Herdez SAB. It trades about 0.14 of its potential returns per unit of risk. Grupo Herdez SAB is currently generating about 0.05 per unit of risk. If you would invest 41.00 in China Feihe Limited on September 12, 2024 and sell it today you would earn a total of 36.00 from holding China Feihe Limited or generate 87.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Feihe Limited vs. Grupo Herdez SAB
Performance |
| Timeline |
| China Feihe Limited |
| Grupo Herdez SAB |
China Feihe and Grupo Herdez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Feihe and Grupo Herdez
The main advantage of trading using opposite China Feihe and Grupo Herdez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Feihe position performs unexpectedly, Grupo Herdez 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 Grupo Herdez will offset losses from the drop in Grupo Herdez's long position.| China Feihe vs. BRF SA ADR | China Feihe vs. Pilgrims Pride Corp | China Feihe vs. John B Sanfilippo | China Feihe vs. Seneca Foods Corp |
| Grupo Herdez vs. China Feihe Limited | Grupo Herdez vs. WH Group Limited | Grupo Herdez vs. BG Foods | Grupo Herdez vs. First Pacific |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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