Correlation Between Constellation Brands and China New
Can any of the company-specific risk be diversified away by investing in both Constellation Brands and China New 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 Constellation Brands and China New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Brands Class and China New Borun, you can compare the effects of market volatilities on Constellation Brands and China New 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 Constellation Brands with a short position of China New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and China New.
Diversification Opportunities for Constellation Brands and China New
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Constellation and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and China New Borun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China New Borun and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with China New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China New Borun has no effect on the direction of Constellation Brands i.e., Constellation Brands and China New go up and down completely randomly.
Pair Corralation between Constellation Brands and China New
If you would invest (100.00) in China New Borun on January 24, 2024 and sell it today you would earn a total of 100.00 from holding China New Borun 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 |
Constellation Brands Class vs. China New Borun
Performance |
| Timeline |
| Constellation Brands |
| China New Borun |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Constellation Brands and China New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Brands and China New
The main advantage of trading using opposite Constellation Brands and China New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Brands position performs unexpectedly, China New 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 New will offset losses from the drop in China New's long position.| Constellation Brands vs. Naked Wines plc | Constellation Brands vs. Andrew Peller Limited | Constellation Brands vs. Iconic Brands | Constellation Brands vs. Naked Wines plc |
| China New vs. Park City Group | China New vs. Bill Com Holdings | China New vs. Asure Software | China New vs. VirnetX Holding Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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