Correlation Between Meiwu Technology and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Reservoir Media 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 Reservoir Media 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 Reservoir Media, you can compare the effects of market volatilities on Meiwu Technology and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Reservoir Media.
Diversification Opportunities for Meiwu Technology and Reservoir Media
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Meiwu and Reservoir is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Reservoir Media go up and down completely randomly.
Pair Corralation between Meiwu Technology and Reservoir Media
Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 2.5 times more return on investment than Reservoir Media. However, Meiwu Technology is 2.5 times more volatile than Reservoir Media. It trades about 0.02 of its potential returns per unit of risk. Reservoir Media is currently generating about 0.04 per unit of risk. If you would invest 103.00 in Meiwu Technology Co on September 3, 2024 and sell it today you would lose (5.00) from holding Meiwu Technology Co or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiwu Technology Co vs. Reservoir Media
Performance |
| Timeline |
| Meiwu Technology |
| Reservoir Media |
Meiwu Technology and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Reservoir Media
The main advantage of trading using opposite Meiwu Technology and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media's long position.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
| Reservoir Media vs. Reading International | Reservoir Media vs. Marcus | Reservoir Media vs. Gaia Inc | Reservoir Media vs. News Corp B |
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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