Correlation Between Westone Information and Qumei Furniture
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By analyzing existing cross correlation between Westone Information Industry and Qumei Furniture Group, you can compare the effects of market volatilities on Westone Information and Qumei Furniture 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 Westone Information with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westone Information and Qumei Furniture.
Diversification Opportunities for Westone Information and Qumei Furniture
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westone and Qumei is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Westone Information Industry and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group and Westone Information 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 Westone Information Industry are associated (or correlated) with Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Westone Information i.e., Westone Information and Qumei Furniture go up and down completely randomly.
Pair Corralation between Westone Information and Qumei Furniture
Assuming the 90 days trading horizon Westone Information Industry is expected to generate 0.46 times more return on investment than Qumei Furniture. However, Westone Information Industry is 2.19 times less risky than Qumei Furniture. It trades about -0.08 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.1 per unit of risk. If you would invest 1,769 in Westone Information Industry on September 28, 2024 and sell it today you would lose (58.00) from holding Westone Information Industry or give up 3.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Westone Information Industry vs. Qumei Furniture Group
Performance |
Timeline |
Westone Information |
Qumei Furniture Group |
Westone Information and Qumei Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westone Information and Qumei Furniture
The main advantage of trading using opposite Westone Information and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westone Information position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture's long position.Westone Information vs. Industrial and Commercial | Westone Information vs. China Construction Bank | Westone Information vs. Agricultural Bank of | Westone Information vs. Bank of China |
Qumei Furniture vs. Agricultural Bank of | Qumei Furniture vs. Industrial and Commercial | Qumei Furniture vs. Bank of China | Qumei Furniture vs. China Construction Bank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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