Correlation Between EZGO Technologies and China Mengniu
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies 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 EZGO Technologies and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and China Mengniu Dairy, you can compare the effects of market volatilities on EZGO Technologies 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 EZGO Technologies with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and China Mengniu.
Diversification Opportunities for EZGO Technologies and China Mengniu
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EZGO and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies 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 EZGO Technologies 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 EZGO Technologies 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 EZGO Technologies i.e., EZGO Technologies and China Mengniu go up and down completely randomly.
Pair Corralation between EZGO Technologies and China Mengniu
Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the China Mengniu. In addition to that, EZGO Technologies is 1.72 times more volatile than China Mengniu Dairy. It trades about -0.07 of its total potential returns per unit of risk. China Mengniu Dairy is currently generating about -0.01 per unit of volatility. If you would invest 2,625 in China Mengniu Dairy on September 2, 2024 and sell it today you would lose (481.00) from holding China Mengniu Dairy or give up 18.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EZGO Technologies vs. China Mengniu Dairy
Performance |
| Timeline |
| EZGO Technologies |
| China Mengniu Dairy |
EZGO Technologies and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZGO Technologies and China Mengniu
The main advantage of trading using opposite EZGO Technologies and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies 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.| EZGO Technologies vs. VF Corporation | EZGO Technologies vs. Levi Strauss Co | EZGO Technologies vs. Columbia Sportswear | EZGO Technologies vs. Oxford Industries |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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