Correlation Between Miniso Group and Bowhead Specialty

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

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

Diversification Opportunities for Miniso Group and Bowhead Specialty

-0.11

Correlation Coefficient

Miniso Group  Bowhead Specialty

Good diversification

The 3 months correlation between Miniso and Bowhead is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group Holding and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and Miniso Group 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 Miniso Group Holding are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Miniso Group i.e., Miniso Group and Bowhead Specialty go up and down completely randomly.

Pair Corralation between Miniso Group and Bowhead Specialty

Given the investment horizon of 90 days Miniso Group Holding is expected to under-perform the Bowhead Specialty. In addition to that, Miniso Group is 2.12 times more volatile than Bowhead Specialty Holdings. It trades about -0.01 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.08 per unit of volatility. If you would invest  3,448  in Bowhead Specialty Holdings on December 20, 2024 and sell it today you would earn a total of  282.00  from holding Bowhead Specialty Holdings or generate 8.18% return on investment over 90 days.

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

Miniso Group Holding  vs.  Bowhead Specialty Holdings

Miniso Group Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Miniso Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Miniso Group is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Bowhead Specialty

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Bowhead Specialty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Miniso Group and Bowhead Specialty

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

The idea behind Miniso Group Holding and Bowhead Specialty Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.