Correlation Between Meiwu Technology and Transocean
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Transocean 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 Transocean 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 Transocean, you can compare the effects of market volatilities on Meiwu Technology and Transocean 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 Transocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Transocean.
Diversification Opportunities for Meiwu Technology and Transocean
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiwu and Transocean is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Transocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transocean 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 Transocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transocean has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Transocean go up and down completely randomly.
Pair Corralation between Meiwu Technology and Transocean
Considering the 90-day investment horizon Meiwu Technology is expected to generate 2.8 times less return on investment than Transocean. But when comparing it to its historical volatility, Meiwu Technology Co is 1.55 times less risky than Transocean. It trades about 0.09 of its potential returns per unit of risk. Transocean is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Transocean on August 27, 2024 and sell it today you would earn a total of 44.00 from holding Transocean or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiwu Technology Co vs. Transocean
Performance |
| Timeline |
| Meiwu Technology |
| Transocean |
Meiwu Technology and Transocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Transocean
The main advantage of trading using opposite Meiwu Technology and Transocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology position performs unexpectedly, Transocean 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 Transocean will offset losses from the drop in Transocean's long position.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
| Transocean vs. Nabors Industries | Transocean vs. Precision Drilling | Transocean vs. Seadrill Limited | Transocean vs. Patterson UTI Energy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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