Correlation Between Analog Devices and Meiwu Technology

Can any of the company-specific risk be diversified away by investing in both Analog Devices and Meiwu Technology 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 Analog Devices and Meiwu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Analog Devices and Meiwu Technology

-0.12

Correlation Coefficient

Analog Devices  Meiwu Technology

Good diversification

The 3 months correlation between Analog and Meiwu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and Analog Devices 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 Analog Devices are associated (or correlated) with Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Analog Devices i.e., Analog Devices and Meiwu Technology go up and down completely randomly.

Pair Corralation between Analog Devices and Meiwu Technology

Considering the 90-day investment horizon Analog Devices is expected to generate 0.16 times more return on investment than Meiwu Technology. However, Analog Devices is 6.33 times less risky than Meiwu Technology. It trades about 0.0 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about -0.2 per unit of risk. If you would invest  21,605  in Analog Devices on December 27, 2024 and sell it today you would lose (247.00) from holding Analog Devices or give up 1.14% of portfolio value over 90 days.

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

Analog Devices  vs.  Meiwu Technology Co

Analog Devices

Risk-Adjusted Performance

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Analog Devices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Meiwu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Analog Devices and Meiwu Technology

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

The idea behind Analog Devices and Meiwu Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.