Correlation Between HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B

Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B 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 HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HAMMONIA Schiffsholding AG and MEITUAN UNSPADR2B, you can compare the effects of market volatilities on HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B 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 HAMMONIA Schiffsholding with a short position of MEITUAN UNSPADR/2B. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B.

Diversification Opportunities for HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B

-0.72

Correlation Coefficient

HAMMONIA Schiffsholding  MEITUAN UNSPADR/2B

Pay attention - limited upside

The 3 months correlation between HAMMONIA and MEITUAN is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and MEITUAN UNSPADR2B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEITUAN UNSPADR/2B and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG are associated (or correlated) with MEITUAN UNSPADR/2B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEITUAN UNSPADR/2B has no effect on the direction of HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B go up and down completely randomly.

Pair Corralation between HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B

Assuming the 90 days trading horizon HAMMONIA Schiffsholding AG is expected to generate 0.56 times more return on investment than MEITUAN UNSPADR/2B. However, HAMMONIA Schiffsholding AG is 1.79 times less risky than MEITUAN UNSPADR/2B. It trades about 0.11 of its potential returns per unit of risk. MEITUAN UNSPADR2B is currently generating about -0.06 per unit of risk. If you would invest  27,400  in HAMMONIA Schiffsholding AG on September 3, 2024 and sell it today you would earn a total of  1,200  from holding HAMMONIA Schiffsholding AG or generate 4.38% return on investment over 90 days.

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

HAMMONIA Schiffsholding AG  vs.  MEITUAN UNSPADR2B

HAMMONIA Schiffsholding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAMMONIA Schiffsholding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HAMMONIA Schiffsholding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

MEITUAN UNSPADR/2B

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEITUAN UNSPADR2B are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, MEITUAN UNSPADR/2B reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B

The main advantage of trading using opposite HAMMONIA Schiffsholding and MEITUAN UNSPADR/2B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding position performs unexpectedly, MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B will offset losses from the drop in MEITUAN UNSPADR/2B's long position.

The idea behind HAMMONIA Schiffsholding AG and MEITUAN UNSPADR2B 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.