Correlation Between AUSNUTRIA DAIRY and COFCO Joycome

Can any of the company-specific risk be diversified away by investing in both AUSNUTRIA DAIRY and COFCO Joycome 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 AUSNUTRIA DAIRY and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AUSNUTRIA DAIRY and COFCO Joycome Foods, you can compare the effects of market volatilities on AUSNUTRIA DAIRY and COFCO Joycome 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 AUSNUTRIA DAIRY with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and COFCO Joycome.

Diversification Opportunities for AUSNUTRIA DAIRY and COFCO Joycome

0.2

Correlation Coefficient

AUSNUTRIA DAIRY  COFCO Joycome

Modest diversification

The 3 months correlation between AUSNUTRIA and COFCO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and COFCO Joycome go up and down completely randomly.

Pair Corralation between AUSNUTRIA DAIRY and COFCO Joycome

Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to under-perform the COFCO Joycome. In addition to that, AUSNUTRIA DAIRY is 1.26 times more volatile than COFCO Joycome Foods. It trades about -0.15 of its total potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.09 per unit of volatility. If you would invest  17.00  in COFCO Joycome Foods on September 28, 2024 and sell it today you would lose (1.00) from holding COFCO Joycome Foods or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AUSNUTRIA DAIRY  vs.  COFCO Joycome Foods

AUSNUTRIA DAIRY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AUSNUTRIA DAIRY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, AUSNUTRIA DAIRY is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

COFCO Joycome Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COFCO Joycome Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AUSNUTRIA DAIRY and COFCO Joycome

The main advantage of trading using opposite AUSNUTRIA DAIRY and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSNUTRIA DAIRY position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.

The idea behind AUSNUTRIA DAIRY and COFCO Joycome Foods 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.