Correlation Between Re Max and Fangdd Network
Can any of the company-specific risk be diversified away by investing in both Re Max and Fangdd Network 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 Re Max and Fangdd Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Re Max Holding and Fangdd Network Group, you can compare the effects of market volatilities on Re Max and Fangdd Network 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 Re Max with a short position of Fangdd Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Re Max and Fangdd Network.
Diversification Opportunities for Re Max and Fangdd Network
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RMAX and Fangdd is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Re Max Holding and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group and Re Max 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 Re Max Holding are associated (or correlated) with Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of Re Max i.e., Re Max and Fangdd Network go up and down completely randomly.
Pair Corralation between Re Max and Fangdd Network
Given the investment horizon of 90 days Re Max Holding is expected to generate 0.62 times more return on investment than Fangdd Network. However, Re Max Holding is 1.6 times less risky than Fangdd Network. It trades about -0.06 of its potential returns per unit of risk. Fangdd Network Group is currently generating about -0.07 per unit of risk. If you would invest 1,035 in Re Max Holding on November 3, 2024 and sell it today you would lose (37.00) from holding Re Max Holding or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Re Max Holding vs. Fangdd Network Group
Performance |
| Timeline |
| Re Max Holding |
| Fangdd Network Group |
Re Max and Fangdd Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Re Max and Fangdd Network
The main advantage of trading using opposite Re Max and Fangdd Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Re Max position performs unexpectedly, Fangdd Network 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 Fangdd Network will offset losses from the drop in Fangdd Network's long position.| Re Max vs. Marcus Millichap | Re Max vs. Frp Holdings Ord | Re Max vs. Maui Land Pineapple | Re Max vs. Transcontinental Realty Investors |
| Fangdd Network vs. Southcorp Capital | Fangdd Network vs. Frp Holdings Ord | Fangdd Network vs. Ucommune International | Fangdd Network vs. Ohmyhome Limited Ordinary |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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