Correlation Between Scottie Resources and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Scottie Resources 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 Scottie Resources and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottie Resources Corp and China Mengniu Dairy, you can compare the effects of market volatilities on Scottie Resources 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 Scottie Resources with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and China Mengniu.
Diversification Opportunities for Scottie Resources and China Mengniu
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scottie and China is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp 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 Scottie Resources 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 Scottie Resources Corp 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 Scottie Resources i.e., Scottie Resources and China Mengniu go up and down completely randomly.
Pair Corralation between Scottie Resources and China Mengniu
Assuming the 90 days horizon Scottie Resources Corp is expected to generate 2.73 times more return on investment than China Mengniu. However, Scottie Resources is 2.73 times more volatile than China Mengniu Dairy. It trades about 0.04 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about 0.04 per unit of risk. If you would invest 12.00 in Scottie Resources Corp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Scottie Resources Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottie Resources Corp vs. China Mengniu Dairy
Performance |
| Timeline |
| Scottie Resources Corp |
| China Mengniu Dairy |
Scottie Resources and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and China Mengniu
The main advantage of trading using opposite Scottie Resources and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources 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.| Scottie Resources vs. Blackrock Silver Corp | Scottie Resources vs. AbraSilver Resource Corp | Scottie Resources vs. CMC Metals | Scottie Resources vs. Metallic Minerals Corp |
| China Mengniu vs. The A2 Milk | China Mengniu vs. Altavoz Entertainment | 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |