Correlation Between Ingredion Incorporated and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Ingredion Incorporated 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 Ingredion Incorporated and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingredion Incorporated and China Mengniu Dairy, you can compare the effects of market volatilities on Ingredion Incorporated 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 Ingredion Incorporated with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingredion Incorporated and China Mengniu.
Diversification Opportunities for Ingredion Incorporated and China Mengniu
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ingredion and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated i.e., Ingredion Incorporated and China Mengniu go up and down completely randomly.
Pair Corralation between Ingredion Incorporated and China Mengniu
If you would invest 148.00 in China Mengniu Dairy on October 9, 2024 and sell it today you would earn a total of 0.00 from holding China Mengniu Dairy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingredion Incorporated vs. China Mengniu Dairy
Performance |
| Timeline |
| Ingredion Incorporated |
| China Mengniu Dairy |
Ingredion Incorporated and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingredion Incorporated and China Mengniu
The main advantage of trading using opposite Ingredion Incorporated and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingredion Incorporated 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.| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
| China Mengniu vs. Associated British Foods | China Mengniu vs. Natures Sunshine Products | China Mengniu vs. Marfrig Global Foods | China Mengniu vs. Ingredion Incorporated |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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