Correlation Between MHHC Enterprises and Didi Global

Can any of the company-specific risk be diversified away by investing in both MHHC Enterprises and Didi Global 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 MHHC Enterprises and Didi Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MHHC Enterprises and Didi Global ADR, you can compare the effects of market volatilities on MHHC Enterprises and Didi Global 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 MHHC Enterprises with a short position of Didi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MHHC Enterprises and Didi Global.

Diversification Opportunities for MHHC Enterprises and Didi Global

-0.51

Correlation Coefficient

MHHC Enterprises  Didi Global

Excellent diversification

The 3 months correlation between MHHC and Didi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MHHC Enterprises and Didi Global ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Didi Global ADR and MHHC Enterprises 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 MHHC Enterprises are associated (or correlated) with Didi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Didi Global ADR has no effect on the direction of MHHC Enterprises i.e., MHHC Enterprises and Didi Global go up and down completely randomly.

Pair Corralation between MHHC Enterprises and Didi Global

If you would invest  435.00  in Didi Global ADR on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Didi Global ADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

MHHC Enterprises  vs.  Didi Global ADR

MHHC Enterprises

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days MHHC Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical indicators, MHHC Enterprises exhibited solid returns over the last few months and may actually be approaching a breakup point.

Didi Global ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Didi Global ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Didi Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MHHC Enterprises and Didi Global

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

The idea behind MHHC Enterprises and Didi Global ADR 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 the CEOs Directory module to screen CEOs from public companies around the world.