Correlation Between PROS Holdings and Meituan
Can any of the company-specific risk be diversified away by investing in both PROS Holdings and Meituan 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 PROS Holdings and Meituan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROS Holdings and Meituan, you can compare the effects of market volatilities on PROS Holdings and Meituan 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 PROS Holdings with a short position of Meituan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROS Holdings and Meituan.
Diversification Opportunities for PROS Holdings and Meituan
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between PROS and Meituan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PROS Holdings and Meituan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan and PROS 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 PROS Holdings are associated (or correlated) with Meituan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan has no effect on the direction of PROS Holdings i.e., PROS Holdings and Meituan go up and down completely randomly.
Pair Corralation between PROS Holdings and Meituan
Considering the 90-day investment horizon PROS Holdings is expected to under-perform the Meituan. But the stock apears to be less risky and, when comparing its historical volatility, PROS Holdings is 1.27 times less risky than Meituan. The stock trades about -0.03 of its potential returns per unit of risk. The Meituan is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Meituan on January 26, 2024 and sell it today you would earn a total of 213.00 from holding Meituan or generate 17.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PROS Holdings vs. Meituan
Performance |
| Timeline |
| PROS Holdings |
| Meituan |
PROS Holdings and Meituan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROS Holdings and Meituan
The main advantage of trading using opposite PROS Holdings and Meituan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROS Holdings position performs unexpectedly, Meituan 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 Meituan will offset losses from the drop in Meituan's long position.| PROS Holdings vs. C3 Ai Inc | PROS Holdings vs. Shopify | PROS Holdings vs. Snowflake | PROS Holdings vs. ServiceNow |
| Meituan vs. Qurate Retail Series | Meituan vs. ThredUp | Meituan vs. AKA Brands Holding | Meituan vs. Alibaba Group Holding |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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