Correlation Between ZhongAn Online and Massimo Group

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

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

Diversification Opportunities for ZhongAn Online and Massimo Group

0.35

Correlation Coefficient

ZhongAn Online  Massimo Group

Weak diversification

The 3 months correlation between ZhongAn and Massimo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and Massimo Group Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massimo Group Common and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with Massimo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massimo Group Common has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and Massimo Group go up and down completely randomly.

Pair Corralation between ZhongAn Online and Massimo Group

Assuming the 90 days horizon ZhongAn Online P is expected to under-perform the Massimo Group. In addition to that, ZhongAn Online is 2.01 times more volatile than Massimo Group Common. It trades about -0.22 of its total potential returns per unit of risk. Massimo Group Common is currently generating about -0.09 per unit of volatility. If you would invest  285.00  in Massimo Group Common on October 10, 2024 and sell it today you would lose (22.00) from holding Massimo Group Common or give up 7.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

ZhongAn Online P  vs.  Massimo Group Common

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Massimo Group Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massimo Group Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ZhongAn Online and Massimo Group

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

The idea behind ZhongAn Online P and Massimo Group Common 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..