Correlation Between Transcontinental and MOGU

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

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

Diversification Opportunities for Transcontinental and MOGU

0.22

Correlation Coefficient

Transcontinental  MOGU

Modest diversification

The 3 months correlation between Transcontinental and MOGU is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental Realty Invest and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU Inc and Transcontinental 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 Transcontinental Realty Investors are associated (or correlated) with MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of Transcontinental i.e., Transcontinental and MOGU go up and down completely randomly.

Pair Corralation between Transcontinental and MOGU

Considering the 90-day investment horizon Transcontinental Realty Investors is expected to under-perform the MOGU. But the stock apears to be less risky and, when comparing its historical volatility, Transcontinental Realty Investors is 2.6 times less risky than MOGU. The stock trades about -0.04 of its potential returns per unit of risk. The MOGU Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  272.00  in MOGU Inc on October 11, 2024 and sell it today you would lose (41.00) from holding MOGU Inc or give up 15.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.59%
Values	Daily Returns

Transcontinental Realty Invest  vs.  MOGU Inc

Transcontinental Realty

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Transcontinental Realty Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Transcontinental is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

MOGU Inc

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transcontinental and MOGU

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

The idea behind Transcontinental Realty Investors and MOGU 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.