Correlation Between Revolve Group and Meiwu Technology

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

By analyzing existing cross correlation between Revolve Group LLC and Meiwu Technology Co, you can compare the effects of market volatilities on Revolve Group and Meiwu Technology 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 Revolve Group with a short position of Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revolve Group and Meiwu Technology.

Diversification Opportunities for Revolve Group and Meiwu Technology

0.59

Correlation Coefficient

Revolve Group  Meiwu Technology

Very weak diversification

The 3 months correlation between Revolve and Meiwu is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Revolve Group LLC and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and Revolve 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 Revolve Group LLC are associated (or correlated) with Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Revolve Group i.e., Revolve Group and Meiwu Technology go up and down completely randomly.

Pair Corralation between Revolve Group and Meiwu Technology

Given the investment horizon of 90 days Revolve Group LLC is expected to generate 0.45 times more return on investment than Meiwu Technology. However, Revolve Group LLC is 2.21 times less risky than Meiwu Technology. It trades about 0.05 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.01 per unit of risk. If you would invest  2,218  in Revolve Group LLC on September 17, 2024 and sell it today you would earn a total of  1,491  from holding Revolve Group LLC or generate 67.22% return on investment over 90 days.

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

Revolve Group LLC  vs.  Meiwu Technology Co

Revolve Group LLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Revolve Group LLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Revolve Group showed solid returns over the last few months and may actually be approaching a breakup point.

Meiwu Technology

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revolve Group and Meiwu Technology

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

The idea behind Revolve Group LLC and Meiwu Technology Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.