Correlation Between HM HENMAUUNSPADR and Ming Le

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

By analyzing existing cross correlation between HM HENMAUUNSPADR 15 and Ming Le Sports, you can compare the effects of market volatilities on HM HENMAUUNSPADR and Ming Le 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 HM HENMAUUNSPADR with a short position of Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM HENMAUUNSPADR and Ming Le.

Diversification Opportunities for HM HENMAUUNSPADR and Ming Le

-0.67

Correlation Coefficient

HM HENMAUUNSPADR  Ming Le

Excellent diversification

The 3 months correlation between HMSA and Ming is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding HM HENMAUUNSPADR 15 and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports and HM HENMAUUNSPADR 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 HM HENMAUUNSPADR 15 are associated (or correlated) with Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of HM HENMAUUNSPADR i.e., HM HENMAUUNSPADR and Ming Le go up and down completely randomly.

Pair Corralation between HM HENMAUUNSPADR and Ming Le

Assuming the 90 days trading horizon HM HENMAUUNSPADR 15 is expected to under-perform the Ming Le. But the stock apears to be less risky and, when comparing its historical volatility, HM HENMAUUNSPADR 15 is 2.64 times less risky than Ming Le. The stock trades about -0.06 of its potential returns per unit of risk. The Ming Le Sports is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Ming Le Sports on September 17, 2024 and sell it today you would earn a total of  15.00  from holding Ming Le Sports or generate 14.29% return on investment over 90 days.

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

HM HENMAUUNSPADR 15  vs.  Ming Le Sports

HM HENMAUUNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HM HENMAUUNSPADR 15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ming Le Sports

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ming Le Sports are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ming Le reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HM HENMAUUNSPADR and Ming Le

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

The idea behind HM HENMAUUNSPADR 15 and Ming Le Sports 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.