Correlation Between Qingdao Foods and Wonders Information
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By analyzing existing cross correlation between Qingdao Foods Co and Wonders Information, you can compare the effects of market volatilities on Qingdao Foods and Wonders Information 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 Qingdao Foods with a short position of Wonders Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Wonders Information.
Diversification Opportunities for Qingdao Foods and Wonders Information
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qingdao and Wonders is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Wonders Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonders Information and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Wonders Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonders Information has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Wonders Information go up and down completely randomly.
Pair Corralation between Qingdao Foods and Wonders Information
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 0.57 times more return on investment than Wonders Information. However, Qingdao Foods Co is 1.76 times less risky than Wonders Information. It trades about 0.07 of its potential returns per unit of risk. Wonders Information is currently generating about 0.02 per unit of risk. If you would invest 1,303 in Qingdao Foods Co on November 7, 2024 and sell it today you would earn a total of 22.00 from holding Qingdao Foods Co or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Wonders Information
Performance |
| Timeline |
| Qingdao Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wonders Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qingdao Foods and Wonders Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Wonders Information
The main advantage of trading using opposite Qingdao Foods and Wonders Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Wonders Information 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 Wonders Information will offset losses from the drop in Wonders Information's long position.The idea behind Qingdao Foods Co and Wonders Information 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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