Correlation Between Advance Auto and Miniso Group
Can any of the company-specific risk be diversified away by investing in both Advance Auto and Miniso 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 Advance Auto and Miniso Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and Miniso Group Holding, you can compare the effects of market volatilities on Advance Auto and Miniso 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 Advance Auto with a short position of Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and Miniso Group.
Diversification Opportunities for Advance Auto and Miniso Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advance and Miniso is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding and Advance Auto 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 Advance Auto Parts are associated (or correlated) with Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Advance Auto i.e., Advance Auto and Miniso Group go up and down completely randomly.
Pair Corralation between Advance Auto and Miniso Group
Considering the 90-day investment horizon Advance Auto Parts is expected to generate 0.76 times more return on investment than Miniso Group. However, Advance Auto Parts is 1.32 times less risky than Miniso Group. It trades about -0.02 of its potential returns per unit of risk. Miniso Group Holding is currently generating about -0.02 per unit of risk. If you would invest 5,071 in Advance Auto Parts on August 24, 2024 and sell it today you would lose (1,202) from holding Advance Auto Parts or give up 23.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Auto Parts vs. Miniso Group Holding
Performance |
| Timeline |
| Advance Auto Parts |
| Miniso Group Holding |
Advance Auto and Miniso Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and Miniso Group
The main advantage of trading using opposite Advance Auto and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto position performs unexpectedly, Miniso 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 Miniso Group will offset losses from the drop in Miniso Group's long position.| Advance Auto vs. AutoZone | Advance Auto vs. Tractor Supply | Advance Auto vs. Genuine Parts Co | Advance Auto vs. Five Below |
| Miniso Group vs. Leslies | Miniso Group vs. Sally Beauty Holdings | Miniso Group vs. ODP Corp | Miniso Group vs. 1 800 FLOWERSCOM |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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