Correlation Between China Mengniu and Predictmedix
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Predictmedix 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 Predictmedix 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 Predictmedix, you can compare the effects of market volatilities on China Mengniu and Predictmedix 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 Predictmedix. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Predictmedix.
Diversification Opportunities for China Mengniu and Predictmedix
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Predictmedix is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Predictmedix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictmedix 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 Predictmedix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictmedix has no effect on the direction of China Mengniu i.e., China Mengniu and Predictmedix go up and down completely randomly.
Pair Corralation between China Mengniu and Predictmedix
Assuming the 90 days horizon China Mengniu Dairy is expected to generate 0.22 times more return on investment than Predictmedix. However, China Mengniu Dairy is 4.6 times less risky than Predictmedix. It trades about -0.05 of its potential returns per unit of risk. Predictmedix is currently generating about -0.01 per unit of risk. If you would invest 2,250 in China Mengniu Dairy on September 1, 2024 and sell it today you would lose (106.00) from holding China Mengniu Dairy or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mengniu Dairy vs. Predictmedix
Performance |
| Timeline |
| China Mengniu Dairy |
| Predictmedix |
China Mengniu and Predictmedix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Predictmedix
The main advantage of trading using opposite China Mengniu and Predictmedix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Predictmedix 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 Predictmedix will offset losses from the drop in Predictmedix'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 |
| Predictmedix vs. Biomerica | Predictmedix vs. Co Diagnostics | Predictmedix vs. Senseonics Holdings | Predictmedix vs. Cytosorbents Crp |
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 Stocks Directory module to find actively traded stocks across global markets.
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