Correlation Between MOGU and Huize Holding

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

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

Diversification Opportunities for MOGU and Huize Holding

-0.28

Correlation Coefficient

MOGU  Huize Holding

Very good diversification

The 3 months correlation between MOGU and Huize is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MOGU Inc and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding and MOGU 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 MOGU Inc are associated (or correlated) with Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of MOGU i.e., MOGU and Huize Holding go up and down completely randomly.

Pair Corralation between MOGU and Huize Holding

Given the investment horizon of 90 days MOGU Inc is expected to generate 0.87 times more return on investment than Huize Holding. However, MOGU Inc is 1.15 times less risky than Huize Holding. It trades about 0.03 of its potential returns per unit of risk. Huize Holding is currently generating about -0.04 per unit of risk. If you would invest  225.00  in MOGU Inc on December 28, 2024 and sell it today you would earn a total of  5.00  from holding MOGU Inc or generate 2.22% return on investment over 90 days.

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

MOGU Inc  vs.  Huize Holding

MOGU Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Huize Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Huize Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with MOGU and Huize Holding

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

The idea behind MOGU Inc and Huize Holding 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.