Correlation Between Meiwu Technology and ChargePoint Holdings

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

By analyzing existing cross correlation between Meiwu Technology Co and ChargePoint Holdings, you can compare the effects of market volatilities on Meiwu Technology and ChargePoint Holdings 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 Meiwu Technology with a short position of ChargePoint Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and ChargePoint Holdings.

Diversification Opportunities for Meiwu Technology and ChargePoint Holdings

-0.28

Correlation Coefficient

Meiwu Technology  ChargePoint Holdings

Very good diversification

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

Pair Corralation between Meiwu Technology and ChargePoint Holdings

Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 1.41 times more return on investment than ChargePoint Holdings. However, Meiwu Technology is 1.41 times more volatile than ChargePoint Holdings. It trades about 0.67 of its potential returns per unit of risk. ChargePoint Holdings is currently generating about 0.02 per unit of risk. If you would invest  85.00  in Meiwu Technology Co on September 25, 2024 and sell it today you would earn a total of  129.00  from holding Meiwu Technology Co or generate 151.76% return on investment over 90 days.

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

Meiwu Technology Co  vs.  ChargePoint Holdings

Meiwu Technology

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ChargePoint Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Meiwu Technology and ChargePoint Holdings

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

The idea behind Meiwu Technology Co and ChargePoint Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.