Correlation Between Mogu Inc and Imedia Brands

By analyzing existing cross correlation between Mogu Inc ADR and Imedia Brands, you can compare the effects of market volatilities on Mogu Inc and Imedia Brands 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 Imedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogu Inc and Imedia Brands.

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

Diversification Opportunities for Mogu Inc and Imedia Brands

0.26
  Correlation Coefficient
Mogu Inc ADR
Imedia Brands

Modest diversification

The 3 months correlation between Mogu Inc and Imedia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mogu Inc ADR and Imedia Brands in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Imedia Brands 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 Imedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imedia Brands has no effect on the direction of Mogu Inc i.e., Mogu Inc and Imedia Brands go up and down completely randomly.

Pair Corralation between Mogu Inc and Imedia Brands

Given the investment horizon of 90 days Mogu Inc ADR is expected to under-perform the Imedia Brands. In addition to that, Mogu Inc is 1.27 times more volatile than Imedia Brands. It trades about -0.05 of its total potential returns per unit of risk. Imedia Brands is currently generating about 0.16 per unit of volatility. If you would invest  542.00  in Imedia Brands on October 20, 2021 and sell it today you would earn a total of  80.00  from holding Imedia Brands or generate 14.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mogu Inc ADR  vs.  Imedia Brands

 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 February 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mogu Inc Price Channel

Imedia Brands 
Imedia Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Imedia Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Imedia Brands may actually be approaching a critical reversion point that can send shares even higher in February 2022.

Imedia Price Channel

Mogu Inc and Imedia Brands Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mogu Inc and Imedia Brands

The main advantage of trading using opposite Mogu Inc and Imedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogu Inc position performs unexpectedly, Imedia Brands 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 Imedia Brands will offset losses from the drop in Imedia Brands' long position.
The idea behind Mogu Inc ADR and Imedia Brands 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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