Correlation Between China Mengniu and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Sprngli, you can compare the effects of market volatilities on China Mengniu and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Chocoladefabriken.
Diversification Opportunities for China Mengniu and Chocoladefabriken
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Chocoladefabriken is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of China Mengniu i.e., China Mengniu and Chocoladefabriken go up and down completely randomly.
Pair Corralation between China Mengniu and Chocoladefabriken
Assuming the 90 days horizon China Mengniu Dairy is expected to generate 2.84 times more return on investment than Chocoladefabriken. However, China Mengniu is 2.84 times more volatile than Chocoladefabriken Lindt Sprngli. It trades about 0.02 of its potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about -0.22 per unit of risk. If you would invest 2,244 in China Mengniu Dairy on September 13, 2024 and sell it today you would lose (2.00) from holding China Mengniu Dairy or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mengniu Dairy vs. Chocoladefabriken Lindt Sprngl
Performance |
| Timeline |
| China Mengniu Dairy |
| Chocoladefabriken Lindt |
China Mengniu and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Chocoladefabriken
The main advantage of trading using opposite China Mengniu and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken'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 |
| Chocoladefabriken vs. Mondelez International | Chocoladefabriken vs. Tootsie Roll Industries | Chocoladefabriken vs. Rocky Mountain Chocolate | Chocoladefabriken vs. Barry Callebaut AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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