Correlation Between Marssenger Kitchenware and Hunan Mendale
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By analyzing existing cross correlation between Marssenger Kitchenware Co and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Marssenger Kitchenware and Hunan Mendale 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 Marssenger Kitchenware with a short position of Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marssenger Kitchenware and Hunan Mendale.
Diversification Opportunities for Marssenger Kitchenware and Hunan Mendale
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marssenger and Hunan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marssenger Kitchenware Co and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile and Marssenger Kitchenware 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 Marssenger Kitchenware Co are associated (or correlated) with Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Marssenger Kitchenware i.e., Marssenger Kitchenware and Hunan Mendale go up and down completely randomly.
Pair Corralation between Marssenger Kitchenware and Hunan Mendale
Assuming the 90 days trading horizon Marssenger Kitchenware Co is expected to under-perform the Hunan Mendale. But the stock apears to be less risky and, when comparing its historical volatility, Marssenger Kitchenware Co is 2.71 times less risky than Hunan Mendale. The stock trades about -0.41 of its potential returns per unit of risk. The Hunan Mendale Hometextile is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 328.00 in Hunan Mendale Hometextile on October 16, 2024 and sell it today you would lose (24.00) from holding Hunan Mendale Hometextile or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marssenger Kitchenware Co vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Marssenger Kitchenware |
| Hunan Mendale Hometextile |
Marssenger Kitchenware and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marssenger Kitchenware and Hunan Mendale
The main advantage of trading using opposite Marssenger Kitchenware and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marssenger Kitchenware position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale's long position.The idea behind Marssenger Kitchenware Co and Hunan Mendale Hometextile 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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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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