Correlation Between Miniso Group and United Parks

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

Diversification Opportunities for Miniso Group and United Parks

0.76

Correlation Coefficient

Miniso Group  United Parks

Poor diversification

The 3 months correlation between Miniso and United is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group Holding and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Miniso Group i.e., Miniso Group and United Parks go up and down completely randomly.

Pair Corralation between Miniso Group and United Parks

Given the investment horizon of 90 days Miniso Group Holding is expected to generate 1.8 times more return on investment than United Parks. However, Miniso Group is 1.8 times more volatile than United Parks Resorts. It trades about -0.03 of its potential returns per unit of risk. United Parks Resorts is currently generating about -0.06 per unit of risk. If you would invest  2,334  in Miniso Group Holding on December 20, 2024 and sell it today you would lose (255.00) from holding Miniso Group Holding or give up 10.93% of portfolio value over 90 days.

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

Miniso Group Holding  vs.  United Parks Resorts

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 latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

United Parks Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Parks Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Miniso Group and United Parks

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

The idea behind Miniso Group Holding and United Parks Resorts 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.