Correlation Between Kraft Heinz and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz 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 Kraft Heinz and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and China Mengniu Dairy, you can compare the effects of market volatilities on Kraft Heinz 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 Kraft Heinz with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and China Mengniu.
Diversification Opportunities for Kraft Heinz and China Mengniu
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kraft and China is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co 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 Kraft Heinz 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 Kraft Heinz Co 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 Kraft Heinz i.e., Kraft Heinz and China Mengniu go up and down completely randomly.
Pair Corralation between Kraft Heinz and China Mengniu
Considering the 90-day investment horizon Kraft Heinz Co is expected to generate 0.65 times more return on investment than China Mengniu. However, Kraft Heinz Co is 1.54 times less risky than China Mengniu. It trades about -0.09 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about -0.13 per unit of risk. If you would invest 3,077 in Kraft Heinz Co on November 3, 2024 and sell it today you would lose (93.00) from holding Kraft Heinz Co or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. China Mengniu Dairy
Performance |
| Timeline |
| Kraft Heinz |
| China Mengniu Dairy |
Kraft Heinz and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and China Mengniu
The main advantage of trading using opposite Kraft Heinz and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz 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.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| China Mengniu vs. Nestle SA ADR | China Mengniu vs. ConAgra Foods | China Mengniu vs. Hormel Foods | China Mengniu vs. Kraft Heinz Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |