Correlation Between Meiwu Technology and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing, you can compare the effects of market volatilities on Meiwu Technology and Virco Manufacturing 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 Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Virco Manufacturing.
Diversification Opportunities for Meiwu Technology and Virco Manufacturing
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiwu and Virco is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Virco Manufacturing go up and down completely randomly.
Pair Corralation between Meiwu Technology and Virco Manufacturing
Considering the 90-day investment horizon Meiwu Technology is expected to generate 2.73 times less return on investment than Virco Manufacturing. In addition to that, Meiwu Technology is 1.38 times more volatile than Virco Manufacturing. It trades about 0.02 of its total potential returns per unit of risk. Virco Manufacturing is currently generating about 0.08 per unit of volatility. If you would invest 1,170 in Virco Manufacturing on September 1, 2024 and sell it today you would earn a total of 472.00 from holding Virco Manufacturing or generate 40.34% 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. Virco Manufacturing
Performance |
| Timeline |
| Meiwu Technology |
| Virco Manufacturing |
Meiwu Technology and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Virco Manufacturing
The main advantage of trading using opposite Meiwu Technology and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing's long position.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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