Correlation Between Fangdd Network and ANGI Homeservices

Can any of the company-specific risk be diversified away by investing in both Fangdd Network and ANGI Homeservices 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 Fangdd Network and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fangdd Network Group and ANGI Homeservices, you can compare the effects of market volatilities on Fangdd Network and ANGI Homeservices 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 Fangdd Network with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fangdd Network and ANGI Homeservices.

Diversification Opportunities for Fangdd Network and ANGI Homeservices

0.44

Correlation Coefficient

Fangdd Network  ANGI Homeservices

Very weak diversification

The 3 months correlation between Fangdd and ANGI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fangdd Network Group and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Fangdd Network 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 Fangdd Network Group are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Fangdd Network i.e., Fangdd Network and ANGI Homeservices go up and down completely randomly.

Pair Corralation between Fangdd Network and ANGI Homeservices

Considering the 90-day investment horizon Fangdd Network Group is expected to under-perform the ANGI Homeservices. In addition to that, Fangdd Network is 1.45 times more volatile than ANGI Homeservices. It trades about -0.22 of its total potential returns per unit of risk. ANGI Homeservices is currently generating about 0.03 per unit of volatility. If you would invest  1,610  in ANGI Homeservices on December 28, 2024 and sell it today you would earn a total of  33.00  from holding ANGI Homeservices or generate 2.05% return on investment over 90 days.

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

Fangdd Network Group  vs.  ANGI Homeservices

Fangdd Network Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fangdd Network Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ANGI Homeservices

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANGI Homeservices are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, ANGI Homeservices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fangdd Network and ANGI Homeservices

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

The idea behind Fangdd Network Group and ANGI Homeservices 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.