Correlation Between Hefei Metalforming and Mango Excellent

Can any of the company-specific risk be diversified away by investing in both Hefei Metalforming and Mango Excellent 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 Hefei Metalforming and Mango Excellent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hefei Metalforming Mach and Mango Excellent Media, you can compare the effects of market volatilities on Hefei Metalforming and Mango Excellent 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 Hefei Metalforming with a short position of Mango Excellent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hefei Metalforming and Mango Excellent.

Diversification Opportunities for Hefei Metalforming and Mango Excellent

0.73

Correlation Coefficient

Hefei Metalforming  Mango Excellent

Poor diversification

The 3 months correlation between Hefei and Mango is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hefei Metalforming Mach and Mango Excellent Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mango Excellent Media and Hefei Metalforming 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 Hefei Metalforming Mach are associated (or correlated) with Mango Excellent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mango Excellent Media has no effect on the direction of Hefei Metalforming i.e., Hefei Metalforming and Mango Excellent go up and down completely randomly.

Pair Corralation between Hefei Metalforming and Mango Excellent

Assuming the 90 days trading horizon Hefei Metalforming Mach is expected to under-perform the Mango Excellent. In addition to that, Hefei Metalforming is 1.07 times more volatile than Mango Excellent Media. It trades about 0.0 of its total potential returns per unit of risk. Mango Excellent Media is currently generating about 0.03 per unit of volatility. If you would invest  2,273  in Mango Excellent Media on October 9, 2024 and sell it today you would earn a total of  219.00  from holding Mango Excellent Media or generate 9.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Hefei Metalforming Mach  vs.  Mango Excellent Media

Hefei Metalforming Mach

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hefei Metalforming Mach are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hefei Metalforming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mango Excellent Media

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mango Excellent Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mango Excellent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hefei Metalforming and Mango Excellent

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

The idea behind Hefei Metalforming Mach and Mango Excellent Media 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.