Correlation Between Plastic Omnium and MEITUAN UNSPADR/2B
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and MEITUAN UNSPADR/2B 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 Plastic Omnium and MEITUAN UNSPADR/2B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and MEITUAN UNSPADR2B, you can compare the effects of market volatilities on Plastic Omnium and MEITUAN UNSPADR/2B 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 Plastic Omnium with a short position of MEITUAN UNSPADR/2B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and MEITUAN UNSPADR/2B.
Diversification Opportunities for Plastic Omnium and MEITUAN UNSPADR/2B
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plastic and MEITUAN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and MEITUAN UNSPADR2B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITUAN UNSPADR/2B and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with MEITUAN UNSPADR/2B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITUAN UNSPADR/2B has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and MEITUAN UNSPADR/2B go up and down completely randomly.
Pair Corralation between Plastic Omnium and MEITUAN UNSPADR/2B
Assuming the 90 days trading horizon Plastic Omnium is expected to under-perform the MEITUAN UNSPADR/2B. But the stock apears to be less risky and, when comparing its historical volatility, Plastic Omnium is 1.66 times less risky than MEITUAN UNSPADR/2B. The stock trades about -0.06 of its potential returns per unit of risk. The MEITUAN UNSPADR2B is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,440 in MEITUAN UNSPADR2B on September 1, 2024 and sell it today you would earn a total of 1,640 from holding MEITUAN UNSPADR2B or generate 67.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Plastic Omnium vs. MEITUAN UNSPADR2B
Performance |
| Timeline |
| Plastic Omnium |
| MEITUAN UNSPADR/2B |
Plastic Omnium and MEITUAN UNSPADR/2B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and MEITUAN UNSPADR/2B
The main advantage of trading using opposite Plastic Omnium and MEITUAN UNSPADR/2B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium position performs unexpectedly, MEITUAN UNSPADR/2B 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 UNSPADR/2B will offset losses from the drop in MEITUAN UNSPADR/2B's long position.| Plastic Omnium vs. PENN NATL GAMING | Plastic Omnium vs. Penn National Gaming | Plastic Omnium vs. Canon Marketing Japan | Plastic Omnium vs. GameStop Corp |
| MEITUAN UNSPADR/2B vs. Tencent Holdings | MEITUAN UNSPADR/2B vs. Baidu Inc | MEITUAN UNSPADR/2B vs. BYD Company Limited |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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