Correlation Between Magnite and Fangdd Network

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

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

Diversification Opportunities for Magnite and Fangdd Network

0.74

Correlation Coefficient

Magnite  Fangdd Network

Poor diversification

The 3 months correlation between Magnite and Fangdd is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Magnite 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 Magnite 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 Magnite 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 Magnite i.e., Magnite and Fangdd Network go up and down completely randomly.

Pair Corralation between Magnite and Fangdd Network

Given the investment horizon of 90 days Magnite is expected to generate 0.78 times more return on investment than Fangdd Network. However, Magnite is 1.28 times less risky than Fangdd Network. It trades about -0.11 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  1,641  in Magnite on December 29, 2024 and sell it today you would lose (411.00) from holding Magnite or give up 25.05% of portfolio value over 90 days.

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

Magnite  vs.  Fangdd Network Group

Magnite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Magnite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Magnite and Fangdd Network

The main advantage of trading using opposite Magnite and Fangdd Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite 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 Magnite 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 Stocks Directory module to find actively traded stocks across global markets.