Correlation Between China Mengniu and WH Group
Can any of the company-specific risk be diversified away by investing in both China Mengniu and WH Group 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 China Mengniu and WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mengniu Dairy and WH Group Ltd, you can compare the effects of market volatilities on China Mengniu and WH Group 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 China Mengniu with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and WH Group.
Diversification Opportunities for China Mengniu and WH Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and WHGLY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group and China Mengniu 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 China Mengniu Dairy are associated (or correlated) with WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group has no effect on the direction of China Mengniu i.e., China Mengniu and WH Group go up and down completely randomly.
Pair Corralation between China Mengniu and WH Group
If you would invest (100.00) in WH Group Ltd on January 25, 2024 and sell it today you would earn a total of 100.00 from holding WH Group Ltd or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
China Mengniu Dairy vs. WH Group Ltd
Performance |
| Timeline |
| China Mengniu Dairy |
| WH Group |
China Mengniu and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and WH Group
The main advantage of trading using opposite China Mengniu and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.| China Mengniu vs. Kellanova | China Mengniu vs. Lancaster Colony | China Mengniu vs. The A2 Milk | China Mengniu vs. Artisan Consumer Goods |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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