Correlation Between China Mengniu and MSCI ACWI
Can any of the company-specific risk be diversified away by investing in both China Mengniu and MSCI ACWI 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 MSCI ACWI 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 MSCI ACWI exAUCONSUMER, you can compare the effects of market volatilities on China Mengniu and MSCI ACWI 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 MSCI ACWI. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and MSCI ACWI.
Diversification Opportunities for China Mengniu and MSCI ACWI
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and MSCI is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and MSCI ACWI exAUCONSUMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI ACWI exAUCONSUMER 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 MSCI ACWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI ACWI exAUCONSUMER has no effect on the direction of China Mengniu i.e., China Mengniu and MSCI ACWI go up and down completely randomly.
Pair Corralation between China Mengniu and MSCI ACWI
Assuming the 90 days horizon China Mengniu Dairy is expected to under-perform the MSCI ACWI. In addition to that, China Mengniu is 6.21 times more volatile than MSCI ACWI exAUCONSUMER. It trades about -0.03 of its total potential returns per unit of risk. MSCI ACWI exAUCONSUMER is currently generating about 0.06 per unit of volatility. If you would invest 2,139 in MSCI ACWI exAUCONSUMER on September 24, 2024 and sell it today you would earn a total of 342.00 from holding MSCI ACWI exAUCONSUMER or generate 15.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
China Mengniu Dairy vs. MSCI ACWI exAUCONSUMER
Performance |
Timeline |
China Mengniu Dairy |
MSCI ACWI exAUCONSUMER |
China Mengniu and MSCI ACWI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Mengniu and MSCI ACWI
The main advantage of trading using opposite China Mengniu and MSCI ACWI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, MSCI ACWI 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 MSCI ACWI will offset losses from the drop in MSCI ACWI's long position.China Mengniu vs. Qed Connect | China Mengniu vs. Branded Legacy | China Mengniu vs. Right On Brands | China Mengniu vs. Yuenglings Ice Cream |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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