Correlation Between Mediaco Holding and Fangdd Network

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

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

Diversification Opportunities for Mediaco Holding and Fangdd Network

0.02

Correlation Coefficient

Mediaco Holding  Fangdd Network

Significant diversification

The 3 months correlation between Mediaco and Fangdd is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mediaco Holding and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group and Mediaco 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 Mediaco Holding are associated (or correlated) with Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of Mediaco Holding i.e., Mediaco Holding and Fangdd Network go up and down completely randomly.

Pair Corralation between Mediaco Holding and Fangdd Network

Given the investment horizon of 90 days Mediaco Holding is expected to generate 0.75 times more return on investment than Fangdd Network. However, Mediaco Holding is 1.34 times less risky than Fangdd Network. It trades about 0.01 of its potential returns per unit of risk. Fangdd Network Group is currently generating about -0.22 per unit of risk. If you would invest  112.00  in Mediaco Holding on December 29, 2024 and sell it today you would lose (1.00) from holding Mediaco Holding or give up 0.89% of portfolio value over 90 days.

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

Mediaco Holding  vs.  Fangdd Network Group

Mediaco Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mediaco Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Mediaco Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Fangdd Network Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fangdd Network Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mediaco Holding and Fangdd Network

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

The idea behind Mediaco Holding and Fangdd Network Group 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.