Correlation Between PDD Holdings and Miniso Group

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Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Miniso Group 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 PDD Holdings and Miniso Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Miniso Group Holding, you can compare the effects of market volatilities on PDD Holdings and Miniso Group 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 PDD Holdings with a short position of Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Miniso Group.

Diversification Opportunities for PDD Holdings and Miniso Group

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between PDD and Miniso is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding and PDD Holdings 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 PDD Holdings are associated (or correlated) with Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of PDD Holdings i.e., PDD Holdings and Miniso Group go up and down completely randomly.

Pair Corralation between PDD Holdings and Miniso Group

Considering the 90-day investment horizon PDD Holdings is expected to under-perform the Miniso Group. But the stock apears to be less risky and, when comparing its historical volatility, PDD Holdings is 1.16 times less risky than Miniso Group. The stock trades about -0.02 of its potential returns per unit of risk. The Miniso Group Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,425  in Miniso Group Holding on September 23, 2024 and sell it today you would lose (91.00) from holding Miniso Group Holding or give up 3.75% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PDD Holdings  vs.  Miniso Group Holding

 Performance 
       Timeline  
PDD Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PDD Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, PDD Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Miniso Group Holding 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
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 unsteady basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

PDD Holdings and Miniso Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PDD Holdings and Miniso Group

The main advantage of trading using opposite PDD Holdings and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Miniso Group 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 Miniso Group will offset losses from the drop in Miniso Group's long position.
The idea behind PDD Holdings and Miniso Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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