Correlation Between Moelis and XIAOMI

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

By analyzing existing cross correlation between Moelis Co and XIAOMI 3375 29 APR 30, you can compare the effects of market volatilities on Moelis and XIAOMI 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 Moelis with a short position of XIAOMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and XIAOMI.

Diversification Opportunities for Moelis and XIAOMI

0.52

Correlation Coefficient

Moelis  XIAOMI

Very weak diversification

The 3 months correlation between Moelis and XIAOMI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and XIAOMI 3375 29 APR 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAOMI 3375 29 and Moelis 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 Moelis Co are associated (or correlated) with XIAOMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAOMI 3375 29 has no effect on the direction of Moelis i.e., Moelis and XIAOMI go up and down completely randomly.

Pair Corralation between Moelis and XIAOMI

Allowing for the 90-day total investment horizon Moelis Co is expected to generate 3.76 times more return on investment than XIAOMI. However, Moelis is 3.76 times more volatile than XIAOMI 3375 29 APR 30. It trades about 0.1 of its potential returns per unit of risk. XIAOMI 3375 29 APR 30 is currently generating about -0.03 per unit of risk. If you would invest  6,636  in Moelis Co on October 24, 2024 and sell it today you would earn a total of  1,098  from holding Moelis Co or generate 16.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	15.25%
Values	Daily Returns

Moelis Co  vs.  XIAOMI 3375 29 APR 30

Moelis

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moelis Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Moelis exhibited solid returns over the last few months and may actually be approaching a breakup point.

XIAOMI 3375 29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XIAOMI 3375 29 APR 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, XIAOMI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moelis and XIAOMI

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

The idea behind Moelis Co and XIAOMI 3375 29 APR 30 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.