Correlation Between WISH Old and PDD Holdings
Can any of the company-specific risk be diversified away by investing in both WISH Old and PDD Holdings 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 WISH Old and PDD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WISH Old and PDD Holdings, you can compare the effects of market volatilities on WISH Old and PDD Holdings 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 WISH Old with a short position of PDD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of WISH Old and PDD Holdings.
Diversification Opportunities for WISH Old and PDD Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WISH and PDD is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding WISH Old and PDD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDD Holdings and WISH Old 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 WISH Old are associated (or correlated) with PDD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDD Holdings has no effect on the direction of WISH Old i.e., WISH Old and PDD Holdings go up and down completely randomly.
Pair Corralation between WISH Old and PDD Holdings
Given the investment horizon of 90 days WISH Old is expected to under-perform the PDD Holdings. In addition to that, WISH Old is 1.75 times more volatile than PDD Holdings. It trades about -0.02 of its total potential returns per unit of risk. PDD Holdings is currently generating about 0.02 per unit of volatility. 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 Against |
| Strength | Insignificant |
| Accuracy | 79.6% |
| Values | Daily Returns |
WISH Old vs. PDD Holdings
Performance |
| Timeline |
| WISH Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PDD Holdings |
WISH Old and PDD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WISH Old and PDD Holdings
The main advantage of trading using opposite WISH Old and PDD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WISH Old position performs unexpectedly, PDD Holdings 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 PDD Holdings will offset losses from the drop in PDD Holdings' long position.| WISH Old vs. Global E Online | WISH Old vs. PDD Holdings | WISH Old vs. Sea | WISH Old vs. Vipshop Holdings Limited |
| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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