Correlation Between European Wax and Meiwu Technology

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Can any of the company-specific risk be diversified away by investing in both European Wax 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 European Wax and Meiwu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Wax Center and Meiwu Technology Co, you can compare the effects of market volatilities on European Wax 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 European Wax with a short position of Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and Meiwu Technology.

Diversification Opportunities for European Wax and Meiwu Technology

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between European and Meiwu is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and European Wax 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 European Wax Center 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 European Wax i.e., European Wax and Meiwu Technology go up and down completely randomly.

Pair Corralation between European Wax and Meiwu Technology

Given the investment horizon of 90 days European Wax Center is expected to generate 0.37 times more return on investment than Meiwu Technology. However, European Wax Center is 2.73 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  1,356  in European Wax Center on August 30, 2024 and sell it today you would lose (763.00) from holding European Wax Center or give up 56.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

European Wax Center  vs.  Meiwu Technology Co

 Performance 
       Timeline  
European Wax Center 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days European Wax Center has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Meiwu Technology 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

European Wax and Meiwu Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with European Wax and Meiwu Technology

The main advantage of trading using opposite European Wax and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax 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.
The idea behind European Wax Center and Meiwu Technology Co 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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