Correlation Between MAHLE Metal and Pinduoduo
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Pinduoduo 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 MAHLE Metal and Pinduoduo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Pinduoduo, you can compare the effects of market volatilities on MAHLE Metal and Pinduoduo 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 MAHLE Metal with a short position of Pinduoduo. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Pinduoduo.
Diversification Opportunities for MAHLE Metal and Pinduoduo
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAHLE and Pinduoduo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Pinduoduo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinduoduo and MAHLE Metal 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 MAHLE Metal Leve are associated (or correlated) with Pinduoduo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinduoduo has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Pinduoduo go up and down completely randomly.
Pair Corralation between MAHLE Metal and Pinduoduo
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.47 times more return on investment than Pinduoduo. However, MAHLE Metal Leve is 2.14 times less risky than Pinduoduo. It trades about -0.26 of its potential returns per unit of risk. Pinduoduo is currently generating about -0.15 per unit of risk. If you would invest 2,951 in MAHLE Metal Leve on August 31, 2024 and sell it today you would lose (275.00) from holding MAHLE Metal Leve or give up 9.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Pinduoduo
Performance |
| Timeline |
| MAHLE Metal Leve |
| Pinduoduo |
MAHLE Metal and Pinduoduo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Pinduoduo
The main advantage of trading using opposite MAHLE Metal and Pinduoduo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Pinduoduo 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 Pinduoduo will offset losses from the drop in Pinduoduo's long position.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Fras le SA | MAHLE Metal vs. Energisa SA |
| Pinduoduo vs. Sumitomo Mitsui Financial | Pinduoduo vs. Bread Financial Holdings | Pinduoduo vs. HDFC Bank Limited | Pinduoduo vs. Marfrig Global Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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