Correlation Between Bowhead Specialty and Miniso Group

Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty and Miniso Group 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 Bowhead Specialty and Miniso Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bowhead Specialty Holdings and Miniso Group Holding, you can compare the effects of market volatilities on Bowhead Specialty and Miniso Group 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 Bowhead Specialty with a short position of Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Miniso Group.

Diversification Opportunities for Bowhead Specialty and Miniso Group

0.51

Correlation Coefficient

Bowhead Specialty  Miniso Group

Very weak diversification

The 3 months correlation between Bowhead and Miniso is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and Miniso Group go up and down completely randomly.

Pair Corralation between Bowhead Specialty and Miniso Group

Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.53 times more return on investment than Miniso Group. However, Bowhead Specialty Holdings is 1.88 times less risky than Miniso Group. It trades about 0.1 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.02 per unit of risk. If you would invest  2,380  in Bowhead Specialty Holdings on October 9, 2024 and sell it today you would earn a total of  847.00  from holding Bowhead Specialty Holdings or generate 35.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.15%
Values	Daily Returns

Bowhead Specialty Holdings  vs.  Miniso Group Holding

Bowhead Specialty

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Bowhead Specialty showed solid returns over the last few months and may actually be approaching a breakup point.

Miniso Group Holding

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bowhead Specialty and Miniso Group

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

The idea behind Bowhead Specialty Holdings and Miniso Group Holding 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.