Correlation Between Ming Le and Progressive

Can any of the company-specific risk be diversified away by investing in both Ming Le and Progressive 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 Progressive 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 The Progressive, you can compare the effects of market volatilities on Ming Le and Progressive 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 Progressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and Progressive.

Diversification Opportunities for Ming Le and Progressive

-0.64

Correlation Coefficient

Ming Le  Progressive

Excellent diversification

The 3 months correlation between Ming and Progressive is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and The Progressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive 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 Progressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive has no effect on the direction of Ming Le i.e., Ming Le and Progressive go up and down completely randomly.

Pair Corralation between Ming Le and Progressive

Assuming the 90 days trading horizon Ming Le Sports is expected to under-perform the Progressive. In addition to that, Ming Le is 2.16 times more volatile than The Progressive. It trades about -0.04 of its total potential returns per unit of risk. The Progressive is currently generating about 0.13 per unit of volatility. If you would invest  22,543  in The Progressive on December 30, 2024 and sell it today you would earn a total of  3,142  from holding The Progressive or generate 13.94% return on investment over 90 days.

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

Ming Le Sports  vs.  The Progressive

Ming Le Sports

Risk-Adjusted Performance

Very Weak

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

Progressive

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Progressive are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Progressive reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ming Le and Progressive

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

The idea behind Ming Le Sports and The Progressive 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.