Correlation Between AKA Brands and Meituan
Can any of the company-specific risk be diversified away by investing in both AKA Brands and Meituan 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 AKA Brands and Meituan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKA Brands Holding and Meituan, you can compare the effects of market volatilities on AKA Brands and Meituan 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 AKA Brands with a short position of Meituan. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Meituan.
Diversification Opportunities for AKA Brands and Meituan
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between AKA and Meituan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Meituan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Meituan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan has no effect on the direction of AKA Brands i.e., AKA Brands and Meituan go up and down completely randomly.
Pair Corralation between AKA Brands and Meituan
Considering the 90-day investment horizon AKA Brands Holding is expected to under-perform the Meituan. In addition to that, AKA Brands is 1.23 times more volatile than Meituan. It trades about 0.0 of its total potential returns per unit of risk. Meituan is currently generating about 0.05 per unit of volatility. If you would invest 2,278 in Meituan on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Meituan or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKA Brands Holding vs. Meituan
Performance |
| Timeline |
| AKA Brands Holding |
| Meituan |
AKA Brands and Meituan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKA Brands and Meituan
The main advantage of trading using opposite AKA Brands and Meituan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands position performs unexpectedly, Meituan 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 will offset losses from the drop in Meituan's long position.| AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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