Correlation Between Pinduoduo and MEITUAN UNSPADR/2B
Can any of the company-specific risk be diversified away by investing in both Pinduoduo and MEITUAN UNSPADR/2B 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 Pinduoduo and MEITUAN UNSPADR/2B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinduoduo and MEITUAN UNSPADR2B, you can compare the effects of market volatilities on Pinduoduo and MEITUAN UNSPADR/2B 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 Pinduoduo with a short position of MEITUAN UNSPADR/2B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinduoduo and MEITUAN UNSPADR/2B.
Diversification Opportunities for Pinduoduo and MEITUAN UNSPADR/2B
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pinduoduo and MEITUAN is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Pinduoduo and MEITUAN UNSPADR2B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITUAN UNSPADR/2B and Pinduoduo 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 Pinduoduo are associated (or correlated) with MEITUAN UNSPADR/2B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITUAN UNSPADR/2B has no effect on the direction of Pinduoduo i.e., Pinduoduo and MEITUAN UNSPADR/2B go up and down completely randomly.
Pair Corralation between Pinduoduo and MEITUAN UNSPADR/2B
Assuming the 90 days trading horizon Pinduoduo is expected to generate 1.09 times more return on investment than MEITUAN UNSPADR/2B. However, Pinduoduo is 1.09 times more volatile than MEITUAN UNSPADR2B. It trades about 0.04 of its potential returns per unit of risk. MEITUAN UNSPADR2B is currently generating about 0.02 per unit of risk. If you would invest 7,900 in Pinduoduo on August 24, 2024 and sell it today you would earn a total of 3,200 from holding Pinduoduo or generate 40.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinduoduo vs. MEITUAN UNSPADR2B
Performance |
| Timeline |
| Pinduoduo |
| MEITUAN UNSPADR/2B |
Pinduoduo and MEITUAN UNSPADR/2B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinduoduo and MEITUAN UNSPADR/2B
The main advantage of trading using opposite Pinduoduo and MEITUAN UNSPADR/2B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinduoduo position performs unexpectedly, MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B will offset losses from the drop in MEITUAN UNSPADR/2B's long position.| Pinduoduo vs. Amazon Inc | Pinduoduo vs. Amazon Inc | Pinduoduo vs. Alibaba Group Holdings | Pinduoduo vs. MEITUAN UNSPADR2B |
| 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 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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