Correlation Between HUTCHMED DRC and MBGGR

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

By analyzing existing cross correlation between HUTCHMED DRC and MBGGR 33 19 MAY 25, you can compare the effects of market volatilities on HUTCHMED DRC and MBGGR 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 HUTCHMED DRC with a short position of MBGGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHMED DRC and MBGGR.

Diversification Opportunities for HUTCHMED DRC and MBGGR

-0.77

Correlation Coefficient

HUTCHMED DRC  MBGGR

Pay attention - limited upside

The 3 months correlation between HUTCHMED and MBGGR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHMED DRC and MBGGR 33 19 MAY 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBGGR 33 19 and HUTCHMED DRC 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 HUTCHMED DRC are associated (or correlated) with MBGGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBGGR 33 19 has no effect on the direction of HUTCHMED DRC i.e., HUTCHMED DRC and MBGGR go up and down completely randomly.

Pair Corralation between HUTCHMED DRC and MBGGR

Considering the 90-day investment horizon HUTCHMED DRC is expected to under-perform the MBGGR. In addition to that, HUTCHMED DRC is 6.84 times more volatile than MBGGR 33 19 MAY 25. It trades about -0.11 of its total potential returns per unit of risk. MBGGR 33 19 MAY 25 is currently generating about -0.16 per unit of volatility. If you would invest  9,913  in MBGGR 33 19 MAY 25 on October 9, 2024 and sell it today you would lose (174.00) from holding MBGGR 33 19 MAY 25 or give up 1.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	40.32%
Values	Daily Returns

HUTCHMED DRC  vs.  MBGGR 33 19 MAY 25

HUTCHMED DRC

Risk-Adjusted Performance

0 of 100

Very Weak

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

MBGGR 33 19

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBGGR 33 19 MAY 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MBGGR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HUTCHMED DRC and MBGGR

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

The idea behind HUTCHMED DRC and MBGGR 33 19 MAY 25 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.