Correlation Between China Mengniu and Else Nutrition
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Else Nutrition 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 Mengniu and Else Nutrition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mengniu Dairy and Else Nutrition Holdings, you can compare the effects of market volatilities on China Mengniu and Else Nutrition 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 Mengniu with a short position of Else Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Else Nutrition.
Diversification Opportunities for China Mengniu and Else Nutrition
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Else is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Else Nutrition Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Else Nutrition Holdings and China Mengniu 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 Mengniu Dairy are associated (or correlated) with Else Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Else Nutrition Holdings has no effect on the direction of China Mengniu i.e., China Mengniu and Else Nutrition go up and down completely randomly.
Pair Corralation between China Mengniu and Else Nutrition
Assuming the 90 days horizon China Mengniu Dairy is expected to generate 0.52 times more return on investment than Else Nutrition. However, China Mengniu Dairy is 1.92 times less risky than Else Nutrition. It trades about 0.05 of its potential returns per unit of risk. Else Nutrition Holdings is currently generating about -0.18 per unit of risk. If you would invest 1,816 in China Mengniu Dairy on September 2, 2024 and sell it today you would earn a total of 328.00 from holding China Mengniu Dairy or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mengniu Dairy vs. Else Nutrition Holdings
Performance |
| Timeline |
| China Mengniu Dairy |
| Else Nutrition Holdings |
China Mengniu and Else Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Else Nutrition
The main advantage of trading using opposite China Mengniu and Else Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Else Nutrition 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 Else Nutrition will offset losses from the drop in Else Nutrition's long position.| China Mengniu vs. The A2 Milk | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
| Else Nutrition vs. Stryve Foods | Else Nutrition vs. Better Choice | Else Nutrition vs. Laird Superfood | Else Nutrition vs. Arcadia Biosciences |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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