Correlation Between MEITUAN UNSPADR/2B and AMA Group
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR/2B and AMA 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 AMA 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 AMA Group Limited, you can compare the effects of market volatilities on MEITUAN UNSPADR/2B and AMA 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 AMA Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR/2B and AMA Group.
Diversification Opportunities for MEITUAN UNSPADR/2B and AMA Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MEITUAN and AMA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B and AMA Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMA Group Limited 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 AMA Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMA Group Limited has no effect on the direction of MEITUAN UNSPADR/2B i.e., MEITUAN UNSPADR/2B and AMA Group go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR/2B and AMA Group
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to under-perform the AMA Group. In addition to that, MEITUAN UNSPADR/2B is 1.14 times more volatile than AMA Group Limited. It trades about -0.1 of its total potential returns per unit of risk. AMA Group Limited is currently generating about 0.09 per unit of volatility. If you would invest 3.70 in AMA Group Limited on August 24, 2024 and sell it today you would earn a total of 0.20 from holding AMA Group Limited or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. AMA Group Limited
Performance |
| Timeline |
| MEITUAN UNSPADR/2B |
| AMA Group Limited |
MEITUAN UNSPADR/2B and AMA Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR/2B and AMA Group
The main advantage of trading using opposite MEITUAN UNSPADR/2B and AMA Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR/2B position performs unexpectedly, AMA 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 AMA Group will offset losses from the drop in AMA Group's long position.| MEITUAN UNSPADR/2B vs. Siamgas And Petrochemicals | MEITUAN UNSPADR/2B vs. MCEWEN MINING INC | MEITUAN UNSPADR/2B vs. Perseus Mining Limited | MEITUAN UNSPADR/2B vs. QIIWI GAMES AB |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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