Correlation Between LightInTheBox Holding and MOGU

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

By analyzing existing cross correlation between LightInTheBox Holding Co and MOGU Inc, you can compare the effects of market volatilities on LightInTheBox Holding and MOGU 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 LightInTheBox Holding with a short position of MOGU. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightInTheBox Holding and MOGU.

Diversification Opportunities for LightInTheBox Holding and MOGU

0.16

Correlation Coefficient

LightInTheBox Holding  MOGU

Average diversification

The 3 months correlation between LightInTheBox and MOGU is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU Inc and LightInTheBox Holding 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 LightInTheBox Holding Co are associated (or correlated) with MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of LightInTheBox Holding i.e., LightInTheBox Holding and MOGU go up and down completely randomly.

Pair Corralation between LightInTheBox Holding and MOGU

Given the investment horizon of 90 days LightInTheBox Holding Co is expected to under-perform the MOGU. In addition to that, LightInTheBox Holding is 1.67 times more volatile than MOGU Inc. It trades about -0.02 of its total potential returns per unit of risk. MOGU Inc is currently generating about 0.03 per unit of volatility. If you would invest  225.00  in MOGU Inc on December 30, 2024 and sell it today you would earn a total of  4.00  from holding MOGU Inc or generate 1.78% return on investment over 90 days.

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

LightInTheBox Holding Co  vs.  MOGU Inc

LightInTheBox Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days LightInTheBox Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

MOGU Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, MOGU is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LightInTheBox Holding and MOGU

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

The idea behind LightInTheBox Holding Co and MOGU Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.