Correlation Between LightInTheBox Holding and Mercurity Fintech
Can any of the company-specific risk be diversified away by investing in both LightInTheBox Holding and Mercurity Fintech 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 LightInTheBox Holding and Mercurity Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightInTheBox Holding Co and Mercurity Fintech Holding, you can compare the effects of market volatilities on LightInTheBox Holding and Mercurity Fintech 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 LightInTheBox Holding with a short position of Mercurity Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightInTheBox Holding and Mercurity Fintech.
Diversification Opportunities for LightInTheBox Holding and Mercurity Fintech
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LightInTheBox and Mercurity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and LightInTheBox Holding 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 LightInTheBox Holding Co are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of LightInTheBox Holding i.e., LightInTheBox Holding and Mercurity Fintech go up and down completely randomly.
Pair Corralation between LightInTheBox Holding and Mercurity Fintech
Given the investment horizon of 90 days LightInTheBox Holding Co is expected to under-perform the Mercurity Fintech. But the stock apears to be less risky and, when comparing its historical volatility, LightInTheBox Holding Co is 2.35 times less risky than Mercurity Fintech. The stock trades about -0.1 of its potential returns per unit of risk. The Mercurity Fintech Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Mercurity Fintech Holding on January 30, 2024 and sell it today you would earn a total of 39.00 from holding Mercurity Fintech Holding or generate 38.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
LightInTheBox Holding Co vs. Mercurity Fintech Holding
Performance |
Timeline |
LightInTheBox Holding |
Mercurity Fintech Holding |
LightInTheBox Holding and Mercurity Fintech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LightInTheBox Holding and Mercurity Fintech
The main advantage of trading using opposite LightInTheBox Holding and Mercurity Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightInTheBox Holding position performs unexpectedly, Mercurity Fintech 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 Mercurity Fintech will offset losses from the drop in Mercurity Fintech's long position.LightInTheBox Holding vs. MercadoLibre | LightInTheBox Holding vs. Pinduoduo | LightInTheBox Holding vs. Alibaba Group Holding | LightInTheBox Holding vs. Global E Online |
Mercurity Fintech vs. Scully Royalty | Mercurity Fintech vs. Donnelley Financial Solutions | Mercurity Fintech vs. Heritage Global | Mercurity Fintech vs. Oppenheimer Holdings |
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 the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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