Correlation Between MOGU and Eureka Acquisition
Can any of the company-specific risk be diversified away by investing in both MOGU and Eureka Acquisition 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 MOGU and Eureka Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOGU Inc and Eureka Acquisition Corp, you can compare the effects of market volatilities on MOGU and Eureka Acquisition 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 MOGU with a short position of Eureka Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOGU and Eureka Acquisition.
Diversification Opportunities for MOGU and Eureka Acquisition
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOGU and Eureka is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MOGU Inc and Eureka Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eureka Acquisition Corp and MOGU 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 MOGU Inc are associated (or correlated) with Eureka Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eureka Acquisition Corp has no effect on the direction of MOGU i.e., MOGU and Eureka Acquisition go up and down completely randomly.
Pair Corralation between MOGU and Eureka Acquisition
Given the investment horizon of 90 days MOGU Inc is expected to generate 101.13 times more return on investment than Eureka Acquisition. However, MOGU is 101.13 times more volatile than Eureka Acquisition Corp. It trades about 0.28 of its potential returns per unit of risk. Eureka Acquisition Corp is currently generating about 0.34 per unit of risk. If you would invest 218.00 in MOGU Inc on October 25, 2024 and sell it today you would earn a total of 36.00 from holding MOGU Inc or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOGU Inc vs. Eureka Acquisition Corp
Performance |
| Timeline |
| MOGU Inc |
| Eureka Acquisition Corp |
MOGU and Eureka Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOGU and Eureka Acquisition
The main advantage of trading using opposite MOGU and Eureka Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOGU position performs unexpectedly, Eureka Acquisition 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 Eureka Acquisition will offset losses from the drop in Eureka Acquisition's long position.| MOGU vs. iPower Inc | MOGU vs. LightInTheBox Holding Co | MOGU vs. Qurate Retail Series | MOGU vs. Kidpik Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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