Correlation Between Miniso Group and Twilio

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

Diversification Opportunities for Miniso Group and Twilio

0.68

Correlation Coefficient

Miniso Group  Twilio

Poor diversification

The 3 months correlation between Miniso and Twilio is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group Holding and Twilio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twilio 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 Twilio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twilio Inc has no effect on the direction of Miniso Group i.e., Miniso Group and Twilio go up and down completely randomly.

Pair Corralation between Miniso Group and Twilio

Given the investment horizon of 90 days Miniso Group is expected to generate 2.39 times less return on investment than Twilio. In addition to that, Miniso Group is 1.75 times more volatile than Twilio Inc. It trades about 0.05 of its total potential returns per unit of risk. Twilio Inc is currently generating about 0.22 per unit of volatility. If you would invest  5,481  in Twilio Inc on September 22, 2024 and sell it today you would earn a total of  5,312  from holding Twilio Inc or generate 96.92% return on investment over 90 days.

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

Miniso Group Holding  vs.  Twilio Inc

Miniso Group Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 14 (%) 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.

Twilio Inc

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Twilio Inc are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Twilio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Miniso Group and Twilio

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

The idea behind Miniso Group Holding and Twilio 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.