Correlation Between MOGU and EBay

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

By analyzing existing cross correlation between MOGU Inc and eBay Inc, you can compare the effects of market volatilities on MOGU and EBay 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 with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOGU and EBay.

Diversification Opportunities for MOGU and EBay

-0.42

Correlation Coefficient

MOGU  EBay

Very good diversification

The 3 months correlation between MOGU and EBay is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MOGU Inc and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and MOGU 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 are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of MOGU i.e., MOGU and EBay go up and down completely randomly.

Pair Corralation between MOGU and EBay

Given the investment horizon of 90 days MOGU Inc is expected to under-perform the EBay. In addition to that, MOGU is 2.19 times more volatile than eBay Inc. It trades about 0.0 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.21 per unit of volatility. If you would invest  4,336  in eBay Inc on January 20, 2024 and sell it today you would earn a total of  659.00  from holding eBay Inc or generate 15.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.35%
Values	Daily Returns

MOGU Inc  vs.  eBay Inc

MOGU Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOGU Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, MOGU is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

eBay Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, EBay showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MOGU and EBay

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

The idea behind MOGU Inc and eBay Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.