Correlation Between Curtiss Motorcycles and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Curtiss Motorcycles and China Mengniu 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 Curtiss Motorcycles and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curtiss Motorcycles and China Mengniu Dairy, you can compare the effects of market volatilities on Curtiss Motorcycles and China Mengniu 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 Curtiss Motorcycles with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curtiss Motorcycles and China Mengniu.
Diversification Opportunities for Curtiss Motorcycles and China Mengniu
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Curtiss and China is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Curtiss Motorcycles and China Mengniu Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mengniu Dairy and Curtiss Motorcycles 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 Curtiss Motorcycles are associated (or correlated) with China Mengniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mengniu Dairy has no effect on the direction of Curtiss Motorcycles i.e., Curtiss Motorcycles and China Mengniu go up and down completely randomly.
Pair Corralation between Curtiss Motorcycles and China Mengniu
Given the investment horizon of 90 days Curtiss Motorcycles is expected to generate 24.54 times more return on investment than China Mengniu. However, Curtiss Motorcycles is 24.54 times more volatile than China Mengniu Dairy. It trades about 0.12 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about 0.07 per unit of risk. If you would invest 6.70 in Curtiss Motorcycles on January 11, 2025 and sell it today you would lose (1.70) from holding Curtiss Motorcycles or give up 25.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curtiss Motorcycles vs. China Mengniu Dairy
Performance |
| Timeline |
| Curtiss Motorcycles |
| China Mengniu Dairy |
Curtiss Motorcycles and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curtiss Motorcycles and China Mengniu
The main advantage of trading using opposite Curtiss Motorcycles and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curtiss Motorcycles position performs unexpectedly, China Mengniu 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 China Mengniu will offset losses from the drop in China Mengniu's long position.| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI Industries |
| China Mengniu vs. BioAdaptives | China Mengniu vs. Qed Connect | China Mengniu vs. Branded Legacy | China Mengniu vs. Grand Havana |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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