Correlation Between Deer Consumer and China Marine
Can any of the company-specific risk be diversified away by investing in both Deer Consumer and China Marine 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 Deer Consumer and China Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deer Consumer Prodct and China Marine Food, you can compare the effects of market volatilities on Deer Consumer and China Marine 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 Deer Consumer with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deer Consumer and China Marine.
Diversification Opportunities for Deer Consumer and China Marine
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deer and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Deer Consumer Prodct and China Marine Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Food and Deer Consumer 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 Deer Consumer Prodct are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Food has no effect on the direction of Deer Consumer i.e., Deer Consumer and China Marine go up and down completely randomly.
Pair Corralation between Deer Consumer and China Marine
If you would invest 0.01 in China Marine Food on September 2, 2024 and sell it today you would earn a total of 0.00 from holding China Marine Food or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deer Consumer Prodct vs. China Marine Food
Performance |
| Timeline |
| Deer Consumer Prodct |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Marine Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Deer Consumer and China Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deer Consumer and China Marine
The main advantage of trading using opposite Deer Consumer and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deer Consumer position performs unexpectedly, China Marine 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 Marine will offset losses from the drop in China Marine's long position.The idea behind Deer Consumer Prodct and China Marine Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| China Marine vs. General Mills | China Marine vs. Nestle SA | China Marine vs. Kellanova | China Marine vs. Campbell Soup |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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