Correlation Between Meituan ADR and AKA Brands
Can any of the company-specific risk be diversified away by investing in both Meituan ADR and AKA Brands 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 Meituan ADR and AKA Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meituan ADR and AKA Brands Holding, you can compare the effects of market volatilities on Meituan ADR and AKA Brands 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 Meituan ADR with a short position of AKA Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meituan ADR and AKA Brands.
Diversification Opportunities for Meituan ADR and AKA Brands
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Meituan and AKA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Meituan ADR and AKA Brands Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKA Brands Holding and Meituan ADR 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 Meituan ADR are associated (or correlated) with AKA Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKA Brands Holding has no effect on the direction of Meituan ADR i.e., Meituan ADR and AKA Brands go up and down completely randomly.
Pair Corralation between Meituan ADR and AKA Brands
Assuming the 90 days horizon Meituan ADR is expected to under-perform the AKA Brands. But the pink sheet apears to be less risky and, when comparing its historical volatility, Meituan ADR is 1.32 times less risky than AKA Brands. The pink sheet trades about -0.12 of its potential returns per unit of risk. The AKA Brands Holding is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,299 in AKA Brands Holding on September 1, 2024 and sell it today you would lose (75.00) from holding AKA Brands Holding or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meituan ADR vs. AKA Brands Holding
Performance |
| Timeline |
| Meituan ADR |
| AKA Brands Holding |
Meituan ADR and AKA Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meituan ADR and AKA Brands
The main advantage of trading using opposite Meituan ADR and AKA Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meituan ADR position performs unexpectedly, AKA Brands 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 AKA Brands will offset losses from the drop in AKA Brands' long position.| Meituan ADR vs. PDD Holdings | Meituan ADR vs. JD Inc Adr | Meituan ADR vs. Baozun Inc | Meituan ADR vs. Global E Online |
| AKA Brands vs. Brilliant Earth Group | AKA Brands vs. Lulus Fashion Lounge | AKA Brands vs. Torrid Holdings | AKA Brands vs. Aveanna Healthcare Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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