Correlation Between Mengtian Home and UE Furniture
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By analyzing existing cross correlation between Mengtian Home Group and UE Furniture Co, you can compare the effects of market volatilities on Mengtian Home and UE Furniture 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 Mengtian Home with a short position of UE Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and UE Furniture.
Diversification Opportunities for Mengtian Home and UE Furniture
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mengtian and 603600 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and UE Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UE Furniture and Mengtian Home 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 Mengtian Home Group are associated (or correlated) with UE Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UE Furniture has no effect on the direction of Mengtian Home i.e., Mengtian Home and UE Furniture go up and down completely randomly.
Pair Corralation between Mengtian Home and UE Furniture
Assuming the 90 days trading horizon Mengtian Home Group is expected to under-perform the UE Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Mengtian Home Group is 1.04 times less risky than UE Furniture. The stock trades about -0.02 of its potential returns per unit of risk. The UE Furniture Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,104 in UE Furniture Co on August 25, 2024 and sell it today you would earn a total of 17.00 from holding UE Furniture Co or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mengtian Home Group vs. UE Furniture Co
Performance |
| Timeline |
| Mengtian Home Group |
| UE Furniture |
Mengtian Home and UE Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and UE Furniture
The main advantage of trading using opposite Mengtian Home and UE Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, UE Furniture 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 UE Furniture will offset losses from the drop in UE Furniture's long position.| Mengtian Home vs. China Petroleum Chemical | Mengtian Home vs. PetroChina Co Ltd | Mengtian Home vs. China State Construction | Mengtian Home vs. China Railway Group |
| UE Furniture vs. Jiangsu Yanghe Brewery | UE Furniture vs. Shandong Mining Machinery | UE Furniture vs. Eastern Air Logistics | UE Furniture vs. Chengtun Mining Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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