Correlation Between China Mengniu and Kerry Group
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Kerry Group 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 Kerry Group 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 Kerry Group plc, you can compare the effects of market volatilities on China Mengniu and Kerry Group 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 Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Kerry Group.
Diversification Opportunities for China Mengniu and Kerry Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Kerry is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Kerry Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group plc 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 Kerry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group plc has no effect on the direction of China Mengniu i.e., China Mengniu and Kerry Group go up and down completely randomly.
Pair Corralation between China Mengniu and Kerry Group
Assuming the 90 days horizon China Mengniu Dairy is expected to under-perform the Kerry Group. In addition to that, China Mengniu is 1.54 times more volatile than Kerry Group plc. It trades about -0.03 of its total potential returns per unit of risk. Kerry Group plc is currently generating about 0.01 per unit of volatility. If you would invest 8,763 in Kerry Group plc on September 14, 2024 and sell it today you would earn a total of 185.00 from holding Kerry Group plc or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.11% |
| Values | Daily Returns |
China Mengniu Dairy vs. Kerry Group plc
Performance |
| Timeline |
| China Mengniu Dairy |
| Kerry Group plc |
China Mengniu and Kerry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Kerry Group
The main advantage of trading using opposite China Mengniu and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Kerry Group 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 Kerry Group will offset losses from the drop in Kerry Group'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 |
| Kerry Group vs. Kerry Group PLC | Kerry Group vs. Danone SA | Kerry Group vs. Carlsberg AS | Kerry Group vs. China Mengniu Dairy |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |