Correlation Between Hunan Mendale and Qumei Furniture
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Qumei Furniture Group, you can compare the effects of market volatilities on Hunan Mendale 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 Hunan Mendale with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Qumei Furniture.
Diversification Opportunities for Hunan Mendale and Qumei Furniture
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hunan and Qumei is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile 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 Hunan Mendale 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 Hunan Mendale Hometextile 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 Hunan Mendale i.e., Hunan Mendale and Qumei Furniture go up and down completely randomly.
Pair Corralation between Hunan Mendale and Qumei Furniture
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to generate 0.91 times more return on investment than Qumei Furniture. However, Hunan Mendale Hometextile is 1.1 times less risky than Qumei Furniture. It trades about 0.21 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about 0.06 per unit of risk. If you would invest 261.00 in Hunan Mendale Hometextile on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Hunan Mendale Hometextile or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Qumei Furniture Group
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Qumei Furniture Group |
Hunan Mendale and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Qumei Furniture
The main advantage of trading using opposite Hunan Mendale and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale 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.| Hunan Mendale vs. Yonyou Auto Information | Hunan Mendale vs. Shaanxi Energy Investment | Hunan Mendale vs. Invengo Information Technology | Hunan Mendale vs. Harbin Hatou Investment |
| Qumei Furniture vs. China Petroleum Chemical | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. China State Construction | Qumei Furniture vs. China Railway Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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