Correlation Between Meiwu Technology and Black Hills
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Black Hills 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 Meiwu Technology and Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiwu Technology Co and Black Hills, you can compare the effects of market volatilities on Meiwu Technology and Black Hills 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 Meiwu Technology with a short position of Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Black Hills.
Diversification Opportunities for Meiwu Technology and Black Hills
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meiwu and Black is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills and Meiwu Technology 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 Meiwu Technology Co are associated (or correlated) with Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Black Hills go up and down completely randomly.
Pair Corralation between Meiwu Technology and Black Hills
Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 7.01 times more return on investment than Black Hills. However, Meiwu Technology is 7.01 times more volatile than Black Hills. It trades about 0.01 of its potential returns per unit of risk. Black Hills is currently generating about 0.04 per unit of risk. If you would invest 551.00 in Meiwu Technology Co on September 12, 2024 and sell it today you would lose (416.50) from holding Meiwu Technology Co or give up 75.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiwu Technology Co vs. Black Hills
Performance |
| Timeline |
| Meiwu Technology |
| Black Hills |
Meiwu Technology and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Black Hills
The main advantage of trading using opposite Meiwu Technology and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
| Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de | Black Hills vs. Allete Inc |
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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