Correlation Between 90331HPL1 and China Mengniu
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By analyzing existing cross correlation between US BANK NATIONAL and China Mengniu Dairy, you can compare the effects of market volatilities on 90331HPL1 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 90331HPL1 with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and China Mengniu.
Diversification Opportunities for 90331HPL1 and China Mengniu
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 90331HPL1 and China is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL 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 90331HPL1 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 US BANK NATIONAL 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 90331HPL1 i.e., 90331HPL1 and China Mengniu go up and down completely randomly.
Pair Corralation between 90331HPL1 and China Mengniu
Assuming the 90 days trading horizon US BANK NATIONAL is expected to under-perform the China Mengniu. But the bond apears to be less risky and, when comparing its historical volatility, US BANK NATIONAL is 2.62 times less risky than China Mengniu. The bond trades about -0.2 of its potential returns per unit of risk. The China Mengniu Dairy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,164 in China Mengniu Dairy on August 31, 2024 and sell it today you would earn a total of 45.00 from holding China Mengniu Dairy or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
US BANK NATIONAL vs. China Mengniu Dairy
Performance |
| Timeline |
| US BANK NATIONAL |
| China Mengniu Dairy |
90331HPL1 and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 90331HPL1 and China Mengniu
The main advantage of trading using opposite 90331HPL1 and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 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.The idea behind US BANK NATIONAL and China Mengniu Dairy 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 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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