Correlation Between Miniso Group and IAC

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

Diversification Opportunities for Miniso Group and IAC

-0.64

Correlation Coefficient

Miniso Group  IAC

Excellent diversification

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

Pair Corralation between Miniso Group and IAC

Given the investment horizon of 90 days Miniso Group Holding is expected to generate 1.63 times more return on investment than IAC. However, Miniso Group is 1.63 times more volatile than IAC Inc. It trades about 0.06 of its potential returns per unit of risk. IAC Inc is currently generating about 0.01 per unit of risk. If you would invest  1,023  in Miniso Group Holding on September 20, 2024 and sell it today you would earn a total of  1,336  from holding Miniso Group Holding or generate 130.6% return on investment over 90 days.

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

Miniso Group Holding  vs.  IAC Inc

Miniso Group Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

IAC Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Miniso Group and IAC

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

The idea behind Miniso Group Holding and IAC Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.