Correlation Between Xilinmen Furniture and Qumei Furniture
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By analyzing existing cross correlation between Xilinmen Furniture Co and Qumei Furniture Group, you can compare the effects of market volatilities on Xilinmen Furniture 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 Xilinmen Furniture with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Qumei Furniture.
Diversification Opportunities for Xilinmen Furniture and Qumei Furniture
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xilinmen and Qumei is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture Co 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 Xilinmen Furniture 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 Xilinmen Furniture Co 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 Xilinmen Furniture i.e., Xilinmen Furniture and Qumei Furniture go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Qumei Furniture
Assuming the 90 days trading horizon Xilinmen Furniture is expected to generate 2.16 times less return on investment than Qumei Furniture. But when comparing it to its historical volatility, Xilinmen Furniture Co is 1.18 times less risky than Qumei Furniture. It trades about 0.02 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Qumei Furniture Group on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Qumei Furniture Group or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilinmen Furniture Co vs. Qumei Furniture Group
Performance |
| Timeline |
| Xilinmen Furniture |
| Qumei Furniture Group |
Xilinmen Furniture and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilinmen Furniture and Qumei Furniture
The main advantage of trading using opposite Xilinmen Furniture and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture 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.| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
| Qumei Furniture vs. Shenzhen Zhongzhuang Construction | Qumei Furniture vs. Sinofibers Technology Co | Qumei Furniture vs. Yuan Longping High tech | Qumei Furniture vs. Ningbo Construction Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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