Correlation Between Mogu Inc and EBay

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Can any of the company-specific risk be diversified away by investing in both Mogu Inc and EBay 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 Mogu Inc and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mogu Inc ADR and EBay Inc, you can compare the effects of market volatilities on Mogu Inc and EBay 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 Mogu Inc with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogu Inc and EBay.

Diversification Opportunities for Mogu Inc and EBay

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Mogu Inc and EBay is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mogu Inc ADR and EBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBay Inc and Mogu Inc 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 Mogu Inc ADR are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBay Inc has no effect on the direction of Mogu Inc i.e., Mogu Inc and EBay go up and down completely randomly.

Pair Corralation between Mogu Inc and EBay

Given the investment horizon of 90 days Mogu Inc ADR is expected to under-perform the EBay. In addition to that, Mogu Inc is 3.77 times more volatile than EBay Inc. It trades about -0.01 of its total potential returns per unit of risk. EBay Inc is currently generating about 0.01 per unit of volatility. If you would invest  4,425  in EBay Inc on February 20, 2022 and sell it today you would earn a total of  6.00  from holding EBay Inc or generate 0.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Mogu Inc ADR  vs.  EBay Inc

 Performance (%) 
      Timeline 
Mogu Inc ADR 
Mogu Inc Performance
0 of 100
Over the last 90 days Mogu Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mogu Inc Price Channel

EBay Inc 
EBay Performance
0 of 100
Over the last 90 days EBay Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

EBay Price Channel

Mogu Inc and EBay Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mogu Inc and EBay

The main advantage of trading using opposite Mogu Inc and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogu Inc position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
The idea behind Mogu Inc ADR and EBay Inc 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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