Correlation Between Minor International and After You

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

By analyzing existing cross correlation between Minor International Public and After You Public, you can compare the effects of market volatilities on Minor International and After You 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 Minor International with a short position of After You. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and After You.

Diversification Opportunities for Minor International and After You

-0.71

Correlation Coefficient

Minor International  After You

Pay attention - limited upside

The 3 months correlation between Minor and After is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and After You Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on After You Public and Minor International 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 Minor International Public are associated (or correlated) with After You. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of After You Public has no effect on the direction of Minor International i.e., Minor International and After You go up and down completely randomly.

Pair Corralation between Minor International and After You

Assuming the 90 days trading horizon Minor International Public is expected to under-perform the After You. But the stock apears to be less risky and, when comparing its historical volatility, Minor International Public is 1.19 times less risky than After You. The stock trades about -0.01 of its potential returns per unit of risk. The After You Public is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  935.00  in After You Public on September 13, 2024 and sell it today you would earn a total of  175.00  from holding After You Public or generate 18.72% return on investment over 90 days.

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

Minor International Public  vs.  After You Public

Minor International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minor International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Minor International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

After You Public

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minor International and After You

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

The idea behind Minor International Public and After You Public 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.