Correlation Between China Mengniu and Hi Sun
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Hi Sun 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 Hi Sun 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 Hi Sun Technology, you can compare the effects of market volatilities on China Mengniu and Hi Sun 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 Hi Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Hi Sun.
Diversification Opportunities for China Mengniu and Hi Sun
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and HISNF is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Hi Sun Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Sun Technology 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 Hi Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Sun Technology has no effect on the direction of China Mengniu i.e., China Mengniu and Hi Sun go up and down completely randomly.
Pair Corralation between China Mengniu and Hi Sun
Assuming the 90 days horizon China Mengniu is expected to generate 9.49 times less return on investment than Hi Sun. But when comparing it to its historical volatility, China Mengniu Dairy is 7.04 times less risky than Hi Sun. It trades about 0.16 of its potential returns per unit of risk. Hi Sun Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3.20 in Hi Sun Technology on December 1, 2024 and sell it today you would earn a total of 3.48 from holding Hi Sun Technology or generate 108.75% 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. Hi Sun Technology
Performance |
| Timeline |
| China Mengniu Dairy |
| Hi Sun Technology |
China Mengniu and Hi Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Hi Sun
The main advantage of trading using opposite China Mengniu and Hi Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Hi Sun 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 Hi Sun will offset losses from the drop in Hi Sun's long position.| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |