Correlation Between Electrovaya Common and Meiwu Technology

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

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

Diversification Opportunities for Electrovaya Common and Meiwu Technology

0.48

Correlation Coefficient

Electrovaya Common  Meiwu Technology

Very weak diversification

The 3 months correlation between Electrovaya and Meiwu is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and Meiwu Technology go up and down completely randomly.

Pair Corralation between Electrovaya Common and Meiwu Technology

Given the investment horizon of 90 days Electrovaya Common Shares is expected to under-perform the Meiwu Technology. In addition to that, Electrovaya Common is 1.11 times more volatile than Meiwu Technology Co. It trades about -0.05 of its total potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.56 per unit of volatility. If you would invest  82.00  in Meiwu Technology Co on September 19, 2024 and sell it today you would earn a total of  69.00  from holding Meiwu Technology Co or generate 84.15% return on investment over 90 days.

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

Electrovaya Common Shares  vs.  Meiwu Technology Co

Electrovaya Common Shares

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Electrovaya Common Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Electrovaya Common is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Meiwu Technology

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electrovaya Common and Meiwu Technology

The main advantage of trading using opposite Electrovaya Common and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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 Electrovaya Common Shares 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.