Correlation Between Contextlogic and MOGU

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

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

Diversification Opportunities for Contextlogic and MOGU

-0.2

Correlation Coefficient

Contextlogic  MOGU

Good diversification

The 3 months correlation between Contextlogic and MOGU is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Contextlogic and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU Inc and Contextlogic 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 Contextlogic 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 Contextlogic i.e., Contextlogic and MOGU go up and down completely randomly.

Pair Corralation between Contextlogic and MOGU

Given the investment horizon of 90 days Contextlogic is expected to generate 0.99 times more return on investment than MOGU. However, Contextlogic is 1.01 times less risky than MOGU. It trades about 0.08 of its potential returns per unit of risk. MOGU Inc is currently generating about -0.03 per unit of risk. If you would invest  660.00  in Contextlogic on December 21, 2024 and sell it today you would earn a total of  95.00  from holding Contextlogic or generate 14.39% return on investment over 90 days.

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

Contextlogic  vs.  MOGU Inc

Contextlogic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Contextlogic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Contextlogic exhibited solid returns over the last few months and may actually be approaching a breakup point.

MOGU Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days MOGU Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Contextlogic and MOGU

The main advantage of trading using opposite Contextlogic and MOGU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contextlogic 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 Contextlogic 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.