Correlation Between Dada Nexus and Hour Loop
Can any of the company-specific risk be diversified away by investing in both Dada Nexus and Hour Loop 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 Dada Nexus and Hour Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dada Nexus and Hour Loop, you can compare the effects of market volatilities on Dada Nexus and Hour Loop 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 Dada Nexus with a short position of Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dada Nexus and Hour Loop.
Diversification Opportunities for Dada Nexus and Hour Loop
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dada and Hour is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dada Nexus and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop and Dada Nexus 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 Dada Nexus are associated (or correlated) with Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of Dada Nexus i.e., Dada Nexus and Hour Loop go up and down completely randomly.
Pair Corralation between Dada Nexus and Hour Loop
Given the investment horizon of 90 days Dada Nexus is expected to generate 1.45 times more return on investment than Hour Loop. However, Dada Nexus is 1.45 times more volatile than Hour Loop. It trades about 0.28 of its potential returns per unit of risk. Hour Loop is currently generating about -0.22 per unit of risk. If you would invest 132.00 in Dada Nexus on November 4, 2024 and sell it today you would earn a total of 51.00 from holding Dada Nexus or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dada Nexus vs. Hour Loop
Performance |
| Timeline |
| Dada Nexus |
| Hour Loop |
Dada Nexus and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dada Nexus and Hour Loop
The main advantage of trading using opposite Dada Nexus and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dada Nexus position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop's long position.| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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