Correlation Between Strix Group and Pinduoduo

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

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

Diversification Opportunities for Strix Group and Pinduoduo

0.6

Correlation Coefficient

Strix Group  Pinduoduo

Poor diversification

The 3 months correlation between Strix and Pinduoduo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Strix Group Plc and Pinduoduo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinduoduo and Strix 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 Strix Group Plc are associated (or correlated) with Pinduoduo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinduoduo has no effect on the direction of Strix Group i.e., Strix Group and Pinduoduo go up and down completely randomly.

Pair Corralation between Strix Group and Pinduoduo

Assuming the 90 days horizon Strix Group is expected to generate 6.87 times less return on investment than Pinduoduo. But when comparing it to its historical volatility, Strix Group Plc is 1.36 times less risky than Pinduoduo. It trades about 0.02 of its potential returns per unit of risk. Pinduoduo is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9,300  in Pinduoduo on December 27, 2024 and sell it today you would earn a total of  2,150  from holding Pinduoduo or generate 23.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Strix Group Plc  vs.  Pinduoduo

Strix Group Plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strix Group Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Strix Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pinduoduo

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pinduoduo are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Pinduoduo reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strix Group and Pinduoduo

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

The idea behind Strix Group Plc and Pinduoduo 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..