Correlation Between China State and Meiwu Technology
Can any of the company-specific risk be diversified away by investing in both China State and Meiwu Technology 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 China State and Meiwu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China State Construction and Meiwu Technology Co, you can compare the effects of market volatilities on China State and Meiwu Technology 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 China State with a short position of Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Meiwu Technology.
Diversification Opportunities for China State and Meiwu Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Meiwu is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and China State 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 China State Construction are associated (or correlated) with Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of China State i.e., China State and Meiwu Technology go up and down completely randomly.
Pair Corralation between China State and Meiwu Technology
Assuming the 90 days horizon China State Construction is expected to generate 0.53 times more return on investment than Meiwu Technology. However, China State Construction is 1.88 times less risky than Meiwu Technology. It trades about 0.03 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about -0.02 per unit of risk. If you would invest 100.00 in China State Construction on August 28, 2024 and sell it today you would earn a total of 5.00 from holding China State Construction or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.44% |
| Values | Daily Returns |
China State Construction vs. Meiwu Technology Co
Performance |
| Timeline |
| China State Construction |
| Meiwu Technology |
China State and Meiwu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Meiwu Technology
The main advantage of trading using opposite China State and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.| China State vs. Aecom Technology | China State vs. Matrix Service Co | China State vs. MYR Group | China State vs. Fluor |
| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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