Correlation Between Leju Holdings and Metrospaces

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

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

Diversification Opportunities for Leju Holdings and Metrospaces

0.1

Correlation Coefficient

Leju Holdings  Metrospaces

Average diversification

The 3 months correlation between Leju and Metrospaces is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Leju Holdings Limited and Metrospaces in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrospaces and Leju 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 Leju Holdings Limited are associated (or correlated) with Metrospaces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrospaces has no effect on the direction of Leju Holdings i.e., Leju Holdings and Metrospaces go up and down completely randomly.

Pair Corralation between Leju Holdings and Metrospaces

If you would invest  0.01  in Metrospaces on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Metrospaces or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Leju Holdings Limited  vs.  Metrospaces

Leju Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Metrospaces

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metrospaces are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Metrospaces exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leju Holdings and Metrospaces

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

The idea behind Leju Holdings Limited and Metrospaces 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.