Correlation Between Danone PK and Tingyi Holding
Can any of the company-specific risk be diversified away by investing in both Danone PK and Tingyi Holding 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 Danone PK and Tingyi Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danone PK and Tingyi Holding Corp, you can compare the effects of market volatilities on Danone PK and Tingyi Holding 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 Danone PK with a short position of Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danone PK and Tingyi Holding.
Diversification Opportunities for Danone PK and Tingyi Holding
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danone and Tingyi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Danone PK and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding Corp and Danone PK 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 Danone PK are associated (or correlated) with Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of Danone PK i.e., Danone PK and Tingyi Holding go up and down completely randomly.
Pair Corralation between Danone PK and Tingyi Holding
If you would invest 157.00 in Tingyi Holding Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Tingyi Holding Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danone PK vs. Tingyi Holding Corp
Performance |
| Timeline |
| Danone PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tingyi Holding Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Danone PK and Tingyi Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danone PK and Tingyi Holding
The main advantage of trading using opposite Danone PK and Tingyi Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danone PK position performs unexpectedly, Tingyi Holding 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 Tingyi Holding will offset losses from the drop in Tingyi Holding's long position.| Danone PK vs. Heineken NV | Danone PK vs. Reckitt Benckiser Group | Danone PK vs. LOreal Co ADR | Danone PK vs. BASF SE ADR |
| Tingyi Holding vs. Torque Lifestyle Brands | Tingyi Holding vs. Naturally Splendid Enterprises | Tingyi Holding vs. Aryzta AG PK | Tingyi Holding vs. First Pacific |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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