Correlation Between Meiwu Technology and Healthy Choice

Can any of the company-specific risk be diversified away by investing in both Meiwu Technology and Healthy Choice 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 Healthy Choice 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 Healthy Choice Wellness, you can compare the effects of market volatilities on Meiwu Technology and Healthy Choice 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 Healthy Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Healthy Choice.

Diversification Opportunities for Meiwu Technology and Healthy Choice

-0.78

Correlation Coefficient

Meiwu Technology  Healthy Choice

Pay attention - limited upside

The 3 months correlation between Meiwu and Healthy is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Healthy Choice Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthy Choice Wellness 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 Healthy Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthy Choice Wellness has no effect on the direction of Meiwu Technology i.e., Meiwu Technology and Healthy Choice go up and down completely randomly.

Pair Corralation between Meiwu Technology and Healthy Choice

Considering the 90-day investment horizon Meiwu Technology Co is expected to generate 1.15 times more return on investment than Healthy Choice. However, Meiwu Technology is 1.15 times more volatile than Healthy Choice Wellness. It trades about 0.41 of its potential returns per unit of risk. Healthy Choice Wellness is currently generating about -0.03 per unit of risk. If you would invest  120.00  in Meiwu Technology Co on October 8, 2024 and sell it today you would earn a total of  158.00  from holding Meiwu Technology Co or generate 131.67% return on investment over 90 days.

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

Meiwu Technology Co  vs.  Healthy Choice Wellness

Meiwu Technology

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Healthy Choice Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthy Choice Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Meiwu Technology and Healthy Choice

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

The idea behind Meiwu Technology Co and Healthy Choice Wellness 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.