Correlation Between 3D Systems and China Mengniu
Can any of the company-specific risk be diversified away by investing in both 3D Systems 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 3D Systems and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3D Systems and China Mengniu Dairy, you can compare the effects of market volatilities on 3D Systems 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 3D Systems with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3D Systems and China Mengniu.
Diversification Opportunities for 3D Systems and China Mengniu
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DDD and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding 3D Systems 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 3D Systems 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 3D Systems 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 3D Systems i.e., 3D Systems and China Mengniu go up and down completely randomly.
Pair Corralation between 3D Systems and China Mengniu
Considering the 90-day investment horizon 3D Systems is expected to generate 1.09 times more return on investment than China Mengniu. However, 3D Systems is 1.09 times more volatile than China Mengniu Dairy. It trades about 0.15 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about 0.11 per unit of risk. If you would invest 191.00 in 3D Systems on September 2, 2024 and sell it today you would earn a total of 106.00 from holding 3D Systems or generate 55.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3D Systems vs. China Mengniu Dairy
Performance |
| Timeline |
| 3D Systems |
| China Mengniu Dairy |
3D Systems and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3D Systems and China Mengniu
The main advantage of trading using opposite 3D Systems and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3D Systems 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.| 3D Systems vs. Ehang Holdings | 3D Systems vs. Vislink Technologies | 3D Systems vs. Foresight Autonomous Holdings | 3D Systems vs. Aquagold International |
| China Mengniu vs. The A2 Milk | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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