Correlation Between INGEVITY and Miniso Group

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

By analyzing existing cross correlation between INGEVITY P 3875 and Miniso Group Holding, you can compare the effects of market volatilities on INGEVITY 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 INGEVITY with a short position of Miniso Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of INGEVITY and Miniso Group.

Diversification Opportunities for INGEVITY and Miniso Group

-0.25

Correlation Coefficient

INGEVITY  Miniso Group

Very good diversification

The 3 months correlation between INGEVITY and Miniso is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INGEVITY P 3875 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 INGEVITY 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 INGEVITY P 3875 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 INGEVITY i.e., INGEVITY and Miniso Group go up and down completely randomly.

Pair Corralation between INGEVITY and Miniso Group

Assuming the 90 days trading horizon INGEVITY P 3875 is expected to generate 18.41 times more return on investment than Miniso Group. However, INGEVITY is 18.41 times more volatile than Miniso Group Holding. It trades about 0.06 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.05 per unit of risk. If you would invest  9,075  in INGEVITY P 3875 on October 4, 2024 and sell it today you would lose (544.00) from holding INGEVITY P 3875 or give up 5.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.51%
Values	Daily Returns

INGEVITY P 3875  vs.  Miniso Group Holding

INGEVITY P 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGEVITY P 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGEVITY P 3875 investors.

Miniso Group Holding

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INGEVITY and Miniso Group

The main advantage of trading using opposite INGEVITY and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INGEVITY 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 INGEVITY P 3875 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.