Correlation Between Meiwu Technology and Allient

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

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

Diversification Opportunities for Meiwu Technology and Allient

0.1

Correlation Coefficient

Meiwu Technology  Allient

Average diversification

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

Pair Corralation between Meiwu Technology and Allient

Considering the 90-day investment horizon Meiwu Technology Co is expected to under-perform the Allient. In addition to that, Meiwu Technology is 3.31 times more volatile than Allient. It trades about -0.02 of its total potential returns per unit of risk. Allient is currently generating about -0.01 per unit of volatility. If you would invest  3,446  in Allient on August 19, 2024 and sell it today you would lose (1,022) from holding Allient or give up 29.66% of portfolio value over 90 days.

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

Meiwu Technology Co  vs.  Allient

Meiwu Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Meiwu Technology may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Allient

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meiwu Technology and Allient

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

The idea behind Meiwu Technology Co and Allient 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.