Correlation Between China Mengniu and Electricite
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Electricite 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 Electricite 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 Electricite De France, you can compare the effects of market volatilities on China Mengniu and Electricite 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 Electricite. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Electricite.
Diversification Opportunities for China Mengniu and Electricite
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Electricite is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Electricite De France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electricite De France 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 Electricite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electricite De France has no effect on the direction of China Mengniu i.e., China Mengniu and Electricite go up and down completely randomly.
Pair Corralation between China Mengniu and Electricite
If you would invest 2,164 in China Mengniu Dairy on August 31, 2024 and sell it today you would earn a total of 45.00 from holding China Mengniu Dairy or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
China Mengniu Dairy vs. Electricite De France
Performance |
| Timeline |
| China Mengniu Dairy |
| Electricite De France |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Mengniu and Electricite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Electricite
The main advantage of trading using opposite China Mengniu and Electricite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Electricite 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 Electricite will offset losses from the drop in Electricite's long position.| China Mengniu vs. The A2 Milk | China Mengniu vs. Altavoz Entertainment | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
| Electricite vs. RWE AG PK | Electricite vs. ENEL Societa per | Electricite vs. Companhia Paranaense de | Electricite vs. Iberdrola SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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