Correlation Between MEITUAN UNSPADR/2B and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR/2B and Steadfast Group 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 MEITUAN UNSPADR/2B and Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and Steadfast Group Limited, you can compare the effects of market volatilities on MEITUAN UNSPADR/2B and Steadfast Group 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 MEITUAN UNSPADR/2B with a short position of Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR/2B and Steadfast Group.
Diversification Opportunities for MEITUAN UNSPADR/2B and Steadfast Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MEITUAN and Steadfast is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group and MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR2B are associated (or correlated) with Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of MEITUAN UNSPADR/2B i.e., MEITUAN UNSPADR/2B and Steadfast Group go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR/2B and Steadfast Group
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to under-perform the Steadfast Group. In addition to that, MEITUAN UNSPADR/2B is 1.94 times more volatile than Steadfast Group Limited. It trades about -0.35 of its total potential returns per unit of risk. Steadfast Group Limited is currently generating about -0.13 per unit of volatility. If you would invest 342.00 in Steadfast Group Limited on October 12, 2024 and sell it today you would lose (8.00) from holding Steadfast Group Limited or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. Steadfast Group Limited
Performance |
| Timeline |
| MEITUAN UNSPADR/2B |
| Steadfast Group |
MEITUAN UNSPADR/2B and Steadfast Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR/2B and Steadfast Group
The main advantage of trading using opposite MEITUAN UNSPADR/2B and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR/2B position performs unexpectedly, Steadfast Group 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.| MEITUAN UNSPADR/2B vs. PDS Biotechnology Corp | MEITUAN UNSPADR/2B vs. UNIDOC HEALTH P | MEITUAN UNSPADR/2B vs. YOOMA WELLNESS INC | MEITUAN UNSPADR/2B vs. OPKO HEALTH |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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