Correlation Between Fangdd Network and New York

Can any of the company-specific risk be diversified away by investing in both Fangdd Network and New York 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 New York 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 New York City, you can compare the effects of market volatilities on Fangdd Network and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fangdd Network and New York.

Diversification Opportunities for Fangdd Network and New York

0.08

Correlation Coefficient

Fangdd Network  New York

Significant diversification

The 3 months correlation between Fangdd and New is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fangdd Network Group and New York City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York City 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York City has no effect on the direction of Fangdd Network i.e., Fangdd Network and New York go up and down completely randomly.

Pair Corralation between Fangdd Network and New York

Considering the 90-day investment horizon Fangdd Network Group is expected to generate 10.28 times more return on investment than New York. However, Fangdd Network is 10.28 times more volatile than New York City. It trades about 0.11 of its potential returns per unit of risk. New York City is currently generating about -0.05 per unit of risk. If you would invest  38.00  in Fangdd Network Group on September 3, 2024 and sell it today you would earn a total of  20.00  from holding Fangdd Network Group or generate 52.63% return on investment over 90 days.

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

Fangdd Network Group  vs.  New York City

Fangdd Network Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fangdd Network Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Fangdd Network displayed solid returns over the last few months and may actually be approaching a breakup point.

New York City

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New York City has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Fangdd Network and New York

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

The idea behind Fangdd Network Group and New York City 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.

Check out your portfolio center.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.