Correlation Between AUSTEVOLL SEAFOOD and Meituan
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD and Meituan 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 AUSTEVOLL SEAFOOD and Meituan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and Meituan, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD and Meituan 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 AUSTEVOLL SEAFOOD with a short position of Meituan. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and Meituan.
Diversification Opportunities for AUSTEVOLL SEAFOOD and Meituan
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUSTEVOLL and Meituan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and Meituan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD are associated (or correlated) with Meituan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan has no effect on the direction of AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and Meituan go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and Meituan
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 0.63 times more return on investment than Meituan. However, AUSTEVOLL SEAFOOD is 1.58 times less risky than Meituan. It trades about 0.07 of its potential returns per unit of risk. Meituan is currently generating about -0.15 per unit of risk. If you would invest 830.00 in AUSTEVOLL SEAFOOD on August 29, 2024 and sell it today you would earn a total of 21.00 from holding AUSTEVOLL SEAFOOD or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. Meituan
Performance |
| Timeline |
| AUSTEVOLL SEAFOOD |
| Meituan |
AUSTEVOLL SEAFOOD and Meituan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSTEVOLL SEAFOOD and Meituan
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and Meituan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD position performs unexpectedly, Meituan 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 Meituan will offset losses from the drop in Meituan's long position.| AUSTEVOLL SEAFOOD vs. TITAN MACHINERY | AUSTEVOLL SEAFOOD vs. ADRIATIC METALS LS 013355 | AUSTEVOLL SEAFOOD vs. GREENX METALS LTD | AUSTEVOLL SEAFOOD vs. Granite Construction |
| Meituan vs. BlueScope Steel Limited | Meituan vs. NORWEGIAN AIR SHUT | Meituan vs. DELTA AIR LINES | Meituan vs. Nippon Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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