Correlation Between Marssenger Kitchenware and Zangge Holding

Can any of the company-specific risk be diversified away by investing in both Marssenger Kitchenware and Zangge Holding 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 Marssenger Kitchenware and Zangge Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marssenger Kitchenware Co and Zangge Holding Co, you can compare the effects of market volatilities on Marssenger Kitchenware and Zangge Holding 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 Marssenger Kitchenware with a short position of Zangge Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marssenger Kitchenware and Zangge Holding.

Diversification Opportunities for Marssenger Kitchenware and Zangge Holding

-0.01

Correlation Coefficient

Marssenger Kitchenware  Zangge Holding

Good diversification

The 3 months correlation between Marssenger and Zangge is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Marssenger Kitchenware Co and Zangge Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zangge Holding and Marssenger Kitchenware 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 Marssenger Kitchenware Co are associated (or correlated) with Zangge Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zangge Holding has no effect on the direction of Marssenger Kitchenware i.e., Marssenger Kitchenware and Zangge Holding go up and down completely randomly.

Pair Corralation between Marssenger Kitchenware and Zangge Holding

Assuming the 90 days trading horizon Marssenger Kitchenware Co is expected to under-perform the Zangge Holding. In addition to that, Marssenger Kitchenware is 1.8 times more volatile than Zangge Holding Co. It trades about -0.06 of its total potential returns per unit of risk. Zangge Holding Co is currently generating about 0.07 per unit of volatility. If you would invest  2,750  in Zangge Holding Co on October 13, 2024 and sell it today you would earn a total of  200.00  from holding Zangge Holding Co or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Marssenger Kitchenware Co  vs.  Zangge Holding Co

Marssenger Kitchenware

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marssenger Kitchenware 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Zangge Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zangge Holding Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zangge Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Marssenger Kitchenware and Zangge Holding

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

The idea behind Marssenger Kitchenware Co and Zangge Holding Co 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.