Correlation Between WuXi Xinje and Qumei Furniture
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By analyzing existing cross correlation between WuXi Xinje Electric and Qumei Furniture Group, you can compare the effects of market volatilities on WuXi Xinje 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 WuXi Xinje with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Xinje and Qumei Furniture.
Diversification Opportunities for WuXi Xinje and Qumei Furniture
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WuXi and Qumei is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Xinje Electric 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 WuXi Xinje 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 WuXi Xinje Electric 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 WuXi Xinje i.e., WuXi Xinje and Qumei Furniture go up and down completely randomly.
Pair Corralation between WuXi Xinje and Qumei Furniture
Assuming the 90 days trading horizon WuXi Xinje Electric is expected to generate 1.06 times more return on investment than Qumei Furniture. However, WuXi Xinje is 1.06 times more volatile than Qumei Furniture Group. It trades about 0.06 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.66 per unit of risk. If you would invest 4,100 in WuXi Xinje Electric on October 16, 2024 and sell it today you would earn a total of 108.00 from holding WuXi Xinje Electric or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi Xinje Electric vs. Qumei Furniture Group
Performance |
| Timeline |
| WuXi Xinje Electric |
| Qumei Furniture Group |
WuXi Xinje and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi Xinje and Qumei Furniture
The main advantage of trading using opposite WuXi Xinje and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Xinje 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.| WuXi Xinje vs. Wuxi Chemical Equipment | WuXi Xinje vs. Guangzhou Haige Communications | WuXi Xinje vs. Shanghai Shibei Hi Tech | WuXi Xinje vs. Liuzhou Chemical Industry |
| Qumei Furniture vs. Cultural Investment Holdings | Qumei Furniture vs. Western Metal Materials | Qumei Furniture vs. Qingdao Choho Industrial | Qumei Furniture vs. Gem Year Industrial 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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