Correlation Between China Mengniu and Glanbia PLC
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Glanbia PLC 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 Glanbia PLC 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 Glanbia PLC ADR, you can compare the effects of market volatilities on China Mengniu and Glanbia PLC 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 Glanbia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Glanbia PLC.
Diversification Opportunities for China Mengniu and Glanbia PLC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Glanbia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Glanbia PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glanbia PLC ADR 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 Glanbia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glanbia PLC ADR has no effect on the direction of China Mengniu i.e., China Mengniu and Glanbia PLC go up and down completely randomly.
Pair Corralation between China Mengniu and Glanbia PLC
Assuming the 90 days horizon China Mengniu Dairy is expected to generate 2.15 times more return on investment than Glanbia PLC. However, China Mengniu is 2.15 times more volatile than Glanbia PLC ADR. It trades about 0.05 of its potential returns per unit of risk. Glanbia PLC ADR is currently generating about 0.01 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 | 46.03% |
| Values | Daily Returns |
China Mengniu Dairy vs. Glanbia PLC ADR
Performance |
| Timeline |
| China Mengniu Dairy |
| Glanbia PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Mengniu and Glanbia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Glanbia PLC
The main advantage of trading using opposite China Mengniu and Glanbia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Glanbia PLC 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 Glanbia PLC will offset losses from the drop in Glanbia PLC's long position.| China Mengniu vs. The A2 Milk | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
| Glanbia PLC vs. Danone SA | Glanbia PLC vs. Lifevantage | Glanbia PLC vs. Simply Good Foods | Glanbia PLC vs. Bellring Brands LLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |