Correlation Between Miniso Group and Ke Holdings

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

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

Diversification Opportunities for Miniso Group and Ke Holdings

-0.03

Correlation Coefficient

Miniso Group  Ke Holdings

Good diversification

The 3 months correlation between Miniso and BEKE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Miniso Group Holding and Ke Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ke Holdings and Miniso Group 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 Miniso Group Holding are associated (or correlated) with Ke Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ke Holdings has no effect on the direction of Miniso Group i.e., Miniso Group and Ke Holdings go up and down completely randomly.

Pair Corralation between Miniso Group and Ke Holdings

Given the investment horizon of 90 days Miniso Group Holding is expected to generate 1.06 times more return on investment than Ke Holdings. However, Miniso Group is 1.06 times more volatile than Ke Holdings. It trades about 0.15 of its potential returns per unit of risk. Ke Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,713  in Miniso Group Holding on September 27, 2024 and sell it today you would earn a total of  768.00  from holding Miniso Group Holding or generate 44.83% return on investment over 90 days.

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

Miniso Group Holding  vs.  Ke Holdings

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.

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.

Pair Trading with Miniso Group and Ke Holdings

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

The idea behind Miniso Group Holding and Ke Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.