Correlation Between Muyuan Foodstuff and Shanghai 2345

Can any of the company-specific risk be diversified away by investing in both Muyuan Foodstuff and Shanghai 2345 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 Muyuan Foodstuff and Shanghai 2345 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Muyuan Foodstuff Co and Shanghai 2345 Network, you can compare the effects of market volatilities on Muyuan Foodstuff and Shanghai 2345 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 Muyuan Foodstuff with a short position of Shanghai 2345. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muyuan Foodstuff and Shanghai 2345.

Diversification Opportunities for Muyuan Foodstuff and Shanghai 2345

0.0

Correlation Coefficient

Muyuan Foodstuff  Shanghai 2345

Pay attention - limited upside

The 3 months correlation between Muyuan and Shanghai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Muyuan Foodstuff Co and Shanghai 2345 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai 2345 Network and Muyuan Foodstuff 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 Muyuan Foodstuff Co are associated (or correlated) with Shanghai 2345. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai 2345 Network has no effect on the direction of Muyuan Foodstuff i.e., Muyuan Foodstuff and Shanghai 2345 go up and down completely randomly.

Pair Corralation between Muyuan Foodstuff and Shanghai 2345

If you would invest (100.00) in Shanghai 2345 Network on September 30, 2024 and sell it today you would earn a total of  100.00  from holding Shanghai 2345 Network or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Muyuan Foodstuff Co  vs.  Shanghai 2345 Network

Muyuan Foodstuff

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muyuan Foodstuff Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shanghai 2345 Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shanghai 2345 Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shanghai 2345 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Muyuan Foodstuff and Shanghai 2345

The main advantage of trading using opposite Muyuan Foodstuff and Shanghai 2345 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muyuan Foodstuff position performs unexpectedly, Shanghai 2345 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 Shanghai 2345 will offset losses from the drop in Shanghai 2345's long position.

The idea behind Muyuan Foodstuff Co and Shanghai 2345 Network pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.