Correlation Between NetEase and Mixi
Can any of the company-specific risk be diversified away by investing in both NetEase and Mixi 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 NetEase and Mixi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetEase and Mixi Inc, you can compare the effects of market volatilities on NetEase and Mixi 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 NetEase with a short position of Mixi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetEase and Mixi.
Diversification Opportunities for NetEase and Mixi
Average diversification
The 3 months correlation between NetEase and Mixi is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NetEase and Mixi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mixi Inc and NetEase 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 NetEase are associated (or correlated) with Mixi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mixi Inc has no effect on the direction of NetEase i.e., NetEase and Mixi go up and down completely randomly.
Pair Corralation between NetEase and Mixi
Given the investment horizon of 90 days NetEase is expected to generate 1.64 times more return on investment than Mixi. However, NetEase is 1.64 times more volatile than Mixi Inc. It trades about 0.03 of its potential returns per unit of risk. Mixi Inc is currently generating about 0.01 per unit of risk. If you would invest 6,562 in NetEase on August 27, 2024 and sell it today you would earn a total of 2,083 from holding NetEase or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
NetEase vs. Mixi Inc
Performance |
| Timeline |
| NetEase |
| Mixi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NetEase and Mixi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetEase and Mixi
The main advantage of trading using opposite NetEase and Mixi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetEase position performs unexpectedly, Mixi 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 Mixi will offset losses from the drop in Mixi's long position.| NetEase vs. Playstudios | NetEase vs. Talkspace | NetEase vs. Katapult Holdings Equity | NetEase vs. Aquagold International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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