Correlation Between Natural Health and Meiwu Technology

Can any of the company-specific risk be diversified away by investing in both Natural Health and Meiwu Technology 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 Natural Health and Meiwu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Natural Health Trend and Meiwu Technology Co, you can compare the effects of market volatilities on Natural Health and Meiwu Technology 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 Natural Health with a short position of Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Meiwu Technology.

Diversification Opportunities for Natural Health and Meiwu Technology

-0.07

Correlation Coefficient

Natural Health  Meiwu Technology

Good diversification

The 3 months correlation between Natural and Meiwu is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and Natural Health 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 Natural Health Trend are associated (or correlated) with Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Natural Health i.e., Natural Health and Meiwu Technology go up and down completely randomly.

Pair Corralation between Natural Health and Meiwu Technology

Given the investment horizon of 90 days Natural Health Trend is expected to under-perform the Meiwu Technology. But the stock apears to be less risky and, when comparing its historical volatility, Natural Health Trend is 6.17 times less risky than Meiwu Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Meiwu Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  335.00  in Meiwu Technology Co on February 3, 2025 and sell it today you would lose (112.00) from holding Meiwu Technology Co or give up 33.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Natural Health Trend  vs.  Meiwu Technology Co

Natural Health Trend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natural Health Trend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Natural Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Meiwu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Meiwu Technology may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Natural Health and Meiwu Technology

The main advantage of trading using opposite Natural Health and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.

The idea behind Natural Health Trend and Meiwu Technology 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.