Correlation Between Meiwu Technology and Coty
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Coty 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 Coty 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 Coty Inc, you can compare the effects of market volatilities on Meiwu Technology and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Coty.
Diversification Opportunities for Meiwu Technology and Coty
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meiwu and Coty is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Coty go up and down completely randomly.
Pair Corralation between Meiwu Technology and Coty
Considering the 90-day investment horizon Meiwu Technology Co is expected to under-perform the Coty. In addition to that, Meiwu Technology is 4.6 times more volatile than Coty Inc. It trades about -0.02 of its total potential returns per unit of risk. Coty Inc is currently generating about -0.05 per unit of volatility. If you would invest 1,078 in Coty Inc on December 4, 2024 and sell it today you would lose (526.00) from holding Coty Inc or give up 48.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Meiwu Technology Co vs. Coty Inc
Performance |
Timeline |
Meiwu Technology |
Coty Inc |
Meiwu Technology and Coty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Meiwu Technology and Coty
The main advantage of trading using opposite Meiwu Technology and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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