Correlation Between Industrial and Qumei Furniture
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By analyzing existing cross correlation between Industrial and Commercial and Qumei Furniture Group, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Qumei Furniture.
Diversification Opportunities for Industrial and Qumei Furniture
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Qumei is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and Qumei Furniture go up and down completely randomly.
Pair Corralation between Industrial and Qumei Furniture
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.37 times more return on investment than Qumei Furniture. However, Industrial and Commercial is 2.7 times less risky than Qumei Furniture. It trades about 0.1 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.03 per unit of risk. If you would invest 456.00 in Industrial and Commercial on September 12, 2024 and sell it today you would earn a total of 186.00 from holding Industrial and Commercial or generate 40.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Qumei Furniture Group
Performance |
| Timeline |
| Industrial and Commercial |
| Qumei Furniture Group |
Industrial and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Qumei Furniture
The main advantage of trading using opposite Industrial and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Eastroc Beverage Group | Industrial vs. China Publishing Media | Industrial vs. Inly Media Co | Industrial vs. Beijing Sanyuan Foods |
| Qumei Furniture vs. Lutian Machinery Co | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. Bank of China | Qumei Furniture vs. Gansu Jiu Steel |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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