Correlation Between Mogu Inc and Parts ID

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Can any of the company-specific risk be diversified away by investing in both Mogu Inc and Parts ID 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 Parts ID 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 Parts ID, you can compare the effects of market volatilities on Mogu Inc and Parts ID 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 Parts ID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogu Inc and Parts ID.

Diversification Opportunities for Mogu Inc and Parts ID

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Mogu Inc and Parts is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mogu Inc ADR and Parts ID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parts ID 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 Parts ID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parts ID has no effect on the direction of Mogu Inc i.e., Mogu Inc and Parts ID go up and down completely randomly.

Pair Corralation between Mogu Inc and Parts ID

Given the investment horizon of 90 days Mogu Inc is expected to generate 12.34 times less return on investment than Parts ID. But when comparing it to its historical volatility, Mogu Inc ADR is 2.18 times less risky than Parts ID. It trades about 0.02 of its potential returns per unit of risk. Parts ID is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Parts ID on April 3, 2022 and sell it today you would earn a total of  29.00  from holding Parts ID or generate 24.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Mogu Inc ADR  vs.  Parts ID

 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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in August 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Last Split Factor
1:12
Last Split Date
2022-03-28

Mogu Inc Price Channel

Parts ID 
Parts Performance
0 of 100
Over the last 90 days Parts ID has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Parts Price Channel

Mogu Inc and Parts ID Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mogu Inc and Parts ID

The main advantage of trading using opposite Mogu Inc and Parts ID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogu Inc position performs unexpectedly, Parts ID 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 Parts ID will offset losses from the drop in Parts ID's long position.
The idea behind Mogu Inc ADR and Parts ID 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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