Correlation Between PDD Holdings and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and IShares MSCI 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 PDD Holdings and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and iShares MSCI China, you can compare the effects of market volatilities on PDD Holdings and IShares MSCI 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 PDD Holdings with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and IShares MSCI.
Diversification Opportunities for PDD Holdings and IShares MSCI
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PDD and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and iShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI China and PDD Holdings 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 PDD Holdings are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI China has no effect on the direction of PDD Holdings i.e., PDD Holdings and IShares MSCI go up and down completely randomly.
Pair Corralation between PDD Holdings and IShares MSCI
Considering the 90-day investment horizon PDD Holdings is expected to generate 1.94 times more return on investment than IShares MSCI. However, PDD Holdings is 1.94 times more volatile than iShares MSCI China. It trades about 0.02 of its potential returns per unit of risk. iShares MSCI China is currently generating about 0.01 per unit of risk. If you would invest 9,111 in PDD Holdings on August 29, 2024 and sell it today you would earn a total of 820.00 from holding PDD Holdings or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. iShares MSCI China
Performance |
| Timeline |
| PDD Holdings |
| iShares MSCI China |
PDD Holdings and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and IShares MSCI
The main advantage of trading using opposite PDD Holdings and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
| IShares MSCI vs. KraneShares CSI China | IShares MSCI vs. Invesco China Technology | IShares MSCI vs. iShares MSCI India | IShares MSCI vs. Xtrackers Harvest CSI |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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