Correlation Between China Mengniu and Toyo Suisan
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Toyo Suisan 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 Toyo Suisan 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 Toyo Suisan Kaisha, you can compare the effects of market volatilities on China Mengniu and Toyo Suisan 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 Toyo Suisan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Toyo Suisan.
Diversification Opportunities for China Mengniu and Toyo Suisan
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Toyo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Toyo Suisan Kaisha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyo Suisan Kaisha 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 Toyo Suisan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyo Suisan Kaisha has no effect on the direction of China Mengniu i.e., China Mengniu and Toyo Suisan go up and down completely randomly.
Pair Corralation between China Mengniu and Toyo Suisan
If you would invest 2,242 in China Mengniu Dairy on September 1, 2024 and sell it today you would lose (98.00) from holding China Mengniu Dairy or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.53% |
| Values | Daily Returns |
China Mengniu Dairy vs. Toyo Suisan Kaisha
Performance |
| Timeline |
| China Mengniu Dairy |
| Toyo Suisan Kaisha |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Mengniu and Toyo Suisan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Toyo Suisan
The main advantage of trading using opposite China Mengniu and Toyo Suisan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Toyo Suisan 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 Toyo Suisan will offset losses from the drop in Toyo Suisan'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 |
| Toyo Suisan vs. Toyo Suisan Kaisha | Toyo Suisan vs. Campbell Soup | Toyo Suisan vs. Calbee Inc | Toyo Suisan vs. John B Sanfilippo |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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