Correlation Between Ming Yang and AUPU Home

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Can any of the company-specific risk be diversified away by investing in both Ming Yang and AUPU 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 AUPU 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 AUPU Home Style, you can compare the effects of market volatilities on Ming Yang and AUPU 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 AUPU Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Yang and AUPU Home.

Diversification Opportunities for Ming Yang and AUPU Home

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ming and AUPU is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ming Yang Smart and AUPU Home Style in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUPU Home Style 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 AUPU Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUPU Home Style has no effect on the direction of Ming Yang i.e., Ming Yang and AUPU Home go up and down completely randomly.

Pair Corralation between Ming Yang and AUPU Home

Assuming the 90 days trading horizon Ming Yang Smart is expected to under-perform the AUPU Home. In addition to that, Ming Yang is 1.07 times more volatile than AUPU Home Style. It trades about -0.36 of its total potential returns per unit of risk. AUPU Home Style is currently generating about -0.07 per unit of volatility. If you would invest  1,109  in AUPU Home Style on October 25, 2024 and sell it today you would lose (43.00) from holding AUPU Home Style or give up 3.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ming Yang Smart  vs.  AUPU Home Style

 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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
AUPU Home Style 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AUPU Home Style has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AUPU Home is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ming Yang and AUPU Home Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ming Yang and AUPU Home

The main advantage of trading using opposite Ming Yang and AUPU Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Yang position performs unexpectedly, AUPU 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 AUPU Home will offset losses from the drop in AUPU Home's long position.
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The idea behind Ming Yang Smart and AUPU Home Style 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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