Correlation Between Ming Yang and A-Zenith Home

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Can any of the company-specific risk be diversified away by investing in both Ming Yang and A-Zenith Home 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 Ming Yang and A-Zenith Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Yang Smart and A Zenith Home Furnishings, you can compare the effects of market volatilities on Ming Yang and A-Zenith Home 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 Ming Yang with a short position of A-Zenith Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Yang and A-Zenith Home.

Diversification Opportunities for Ming Yang and A-Zenith Home

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ming and A-Zenith is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ming Yang Smart and A Zenith Home Furnishings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Zenith Home and Ming Yang 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 Ming Yang Smart are associated (or correlated) with A-Zenith Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Zenith Home has no effect on the direction of Ming Yang i.e., Ming Yang and A-Zenith Home go up and down completely randomly.

Pair Corralation between Ming Yang and A-Zenith Home

Assuming the 90 days trading horizon Ming Yang Smart is expected to generate 0.6 times more return on investment than A-Zenith Home. However, Ming Yang Smart is 1.68 times less risky than A-Zenith Home. It trades about -0.08 of its potential returns per unit of risk. A Zenith Home Furnishings is currently generating about -0.08 per unit of risk. If you would invest  1,217  in Ming Yang Smart on November 4, 2024 and sell it today you would lose (179.00) from holding Ming Yang Smart or give up 14.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ming Yang Smart  vs.  A Zenith Home Furnishings

 Performance 
       Timeline  
Ming Yang Smart 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ming Yang Smart has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
A Zenith Home 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days A Zenith Home Furnishings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ming Yang and A-Zenith Home Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ming Yang and A-Zenith Home

The main advantage of trading using opposite Ming Yang and A-Zenith Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Yang position performs unexpectedly, A-Zenith Home 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 A-Zenith Home will offset losses from the drop in A-Zenith Home's long position.
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The idea behind Ming Yang Smart and A Zenith Home Furnishings 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 Stocks Directory module to find actively traded stocks across global markets.

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