Correlation Between Chuangs China and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Dairy Farm 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 Chuangs China and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and Dairy Farm International, you can compare the effects of market volatilities on Chuangs China and Dairy Farm 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 Chuangs China with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Dairy Farm.
Diversification Opportunities for Chuangs China and Dairy Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and Chuangs China 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 Chuangs China Investments are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Chuangs China i.e., Chuangs China and Dairy Farm go up and down completely randomly.
Pair Corralation between Chuangs China and Dairy Farm
Assuming the 90 days horizon Chuangs China Investments is expected to under-perform the Dairy Farm. In addition to that, Chuangs China is 2.33 times more volatile than Dairy Farm International. It trades about -0.01 of its total potential returns per unit of risk. Dairy Farm International is currently generating about 0.01 per unit of volatility. If you would invest 239.00 in Dairy Farm International on August 31, 2024 and sell it today you would lose (9.00) from holding Dairy Farm International or give up 3.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. Dairy Farm International
Performance |
| Timeline |
| Chuangs China Investments |
| Dairy Farm International |
Chuangs China and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Dairy Farm
The main advantage of trading using opposite Chuangs China and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
| Dairy Farm vs. TESCO PLC LS 0633333 | Dairy Farm vs. Superior Plus Corp | Dairy Farm vs. NMI Holdings | Dairy Farm vs. Origin Agritech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |