Correlation Between Mogu Inc and Lightinthebox Holding

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

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

Diversification Opportunities for Mogu Inc and Lightinthebox Holding

0.96
  Correlation Coefficient
Mogu Inc ADR
Lightinthebox Holding

Almost no diversification

The 3 months correlation between Mogu Inc and Lightinthebox is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mogu Inc ADR and Lightinthebox Holding Co in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Lightinthebox Holding 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 Lightinthebox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightinthebox Holding has no effect on the direction of Mogu Inc i.e., Mogu Inc and Lightinthebox Holding go up and down completely randomly.

Pair Corralation between Mogu Inc and Lightinthebox Holding

Given the investment horizon of 90 days Mogu Inc ADR is expected to under-perform the Lightinthebox Holding. In addition to that, Mogu Inc is 1.24 times more volatile than Lightinthebox Holding Co. It trades about -0.01 of its total potential returns per unit of risk. Lightinthebox Holding Co is currently generating about 0.03 per unit of volatility. If you would invest  105.00  in Lightinthebox Holding Co on October 20, 2021 and sell it today you would lose (3.00)  from holding Lightinthebox Holding Co or give up 2.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Mogu Inc ADR  vs.  Lightinthebox Holding Co

 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

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

Lightinthebox Price Channel

Mogu Inc and Lightinthebox Holding Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mogu Inc and Lightinthebox Holding

The main advantage of trading using opposite Mogu Inc and Lightinthebox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogu Inc position performs unexpectedly, Lightinthebox Holding 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 Lightinthebox Holding will offset losses from the drop in Lightinthebox Holding's long position.
The idea behind Mogu Inc ADR and Lightinthebox Holding Co 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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