Correlation Between Ming Le and VIRG NATL

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Can any of the company-specific risk be diversified away by investing in both Ming Le and VIRG NATL 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 Ming Le and VIRG NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and VIRG NATL BANKSH, you can compare the effects of market volatilities on Ming Le and VIRG NATL 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 Ming Le with a short position of VIRG NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and VIRG NATL.

Diversification Opportunities for Ming Le and VIRG NATL

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ming and VIRG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH and Ming Le 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 Ming Le Sports are associated (or correlated) with VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of Ming Le i.e., Ming Le and VIRG NATL go up and down completely randomly.

Pair Corralation between Ming Le and VIRG NATL

Assuming the 90 days trading horizon Ming Le Sports is expected to generate 0.94 times more return on investment than VIRG NATL. However, Ming Le Sports is 1.07 times less risky than VIRG NATL. It trades about 0.02 of its potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.02 per unit of risk. If you would invest  129.00  in Ming Le Sports on September 2, 2024 and sell it today you would earn a total of  10.00  from holding Ming Le Sports or generate 7.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ming Le Sports  vs.  VIRG NATL BANKSH

 Performance 
       Timeline  
Ming Le Sports 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ming Le Sports are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ming Le unveiled solid returns over the last few months and may actually be approaching a breakup point.
VIRG NATL BANKSH 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in VIRG NATL BANKSH are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIRG NATL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ming Le and VIRG NATL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ming Le and VIRG NATL

The main advantage of trading using opposite Ming Le and VIRG NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le position performs unexpectedly, VIRG NATL 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 VIRG NATL will offset losses from the drop in VIRG NATL's long position.
The idea behind Ming Le Sports and VIRG NATL BANKSH 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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