Correlation Between Boxed and Meituan
Can any of the company-specific risk be diversified away by investing in both Boxed 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 Boxed and Meituan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boxed Inc and Meituan, you can compare the effects of market volatilities on Boxed 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 Boxed with a short position of Meituan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxed and Meituan.
Diversification Opportunities for Boxed and Meituan
Pay attention - limited upside
The 3 months correlation between Boxed and Meituan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boxed Inc and Meituan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan and Boxed 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 Boxed Inc 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 Boxed i.e., Boxed and Meituan go up and down completely randomly.
Pair Corralation between Boxed and Meituan
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 | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Boxed Inc vs. Meituan
Performance |
| Timeline |
| Boxed Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Meituan |
Boxed and Meituan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boxed and Meituan
The main advantage of trading using opposite Boxed and Meituan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boxed 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.The idea behind Boxed Inc and Meituan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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