Correlation Between Ke Holdings and Miniso Group

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

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

Diversification Opportunities for Ke Holdings and Miniso Group

-0.03

Correlation Coefficient

Ke Holdings  Miniso Group

Good diversification

The 3 months correlation between BEKE and Miniso is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings 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 Ke Holdings 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 Ke Holdings 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 Ke Holdings i.e., Ke Holdings and Miniso Group go up and down completely randomly.

Pair Corralation between Ke Holdings and Miniso Group

Given the investment horizon of 90 days Ke Holdings is expected to under-perform the Miniso Group. But the stock apears to be less risky and, when comparing its historical volatility, Ke Holdings is 1.59 times less risky than Miniso Group. The stock trades about -0.01 of its potential returns per unit of risk. The Miniso Group Holding is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,740  in Miniso Group Holding on September 27, 2024 and sell it today you would earn a total of  741.00  from holding Miniso Group Holding or generate 42.59% return on investment over 90 days.

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

Ke Holdings  vs.  Miniso Group Holding

Ke Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ke Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Ke Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Miniso Group Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ke Holdings and Miniso Group

The main advantage of trading using opposite Ke Holdings and Miniso Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings 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 Ke Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.