Correlation Between Quectel Wireless and CNPC Capital

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Can any of the company-specific risk be diversified away by investing in both Quectel Wireless and CNPC Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Quectel Wireless and CNPC Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quectel Wireless Solutions and CNPC Capital Co, you can compare the effects of market volatilities on Quectel Wireless and CNPC Capital 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 Quectel Wireless with a short position of CNPC Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quectel Wireless and CNPC Capital.

Diversification Opportunities for Quectel Wireless and CNPC Capital

QuectelCNPCDiversified AwayQuectelCNPCDiversified Away100%
-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Quectel and CNPC is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Quectel Wireless Solutions and CNPC Capital Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNPC Capital and Quectel Wireless 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 Quectel Wireless Solutions are associated (or correlated) with CNPC Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNPC Capital has no effect on the direction of Quectel Wireless i.e., Quectel Wireless and CNPC Capital go up and down completely randomly.

Pair Corralation between Quectel Wireless and CNPC Capital

Assuming the 90 days trading horizon Quectel Wireless Solutions is expected to generate 1.41 times more return on investment than CNPC Capital. However, Quectel Wireless is 1.41 times more volatile than CNPC Capital Co. It trades about 0.02 of its potential returns per unit of risk. CNPC Capital Co is currently generating about 0.03 per unit of risk. If you would invest  8,546  in Quectel Wireless Solutions on November 20, 2024 and sell it today you would earn a total of  69.00  from holding Quectel Wireless Solutions or generate 0.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Quectel Wireless Solutions  vs.  CNPC Capital Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20020406080
JavaScript chart by amCharts 3.21.15603236 000617
       Timeline  
Quectel Wireless Sol 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Quectel Wireless Solutions are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Quectel Wireless sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5060708090
CNPC Capital 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CNPC Capital Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.5

Quectel Wireless and CNPC Capital Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.27-9.94-6.61-3.280.03.617.2810.9414.61 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15603236 000617
       Returns  

Pair Trading with Quectel Wireless and CNPC Capital

The main advantage of trading using opposite Quectel Wireless and CNPC Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quectel Wireless position performs unexpectedly, CNPC Capital 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 CNPC Capital will offset losses from the drop in CNPC Capital's long position.
The idea behind Quectel Wireless Solutions and CNPC Capital Co 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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