Correlation Between UE Furniture and Qumei Furniture
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By analyzing existing cross correlation between UE Furniture Co and Qumei Furniture Group, you can compare the effects of market volatilities on UE 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 UE Furniture with a short position of Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Qumei Furniture.
Diversification Opportunities for UE Furniture and Qumei Furniture
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 603600 and Qumei is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding UE 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 UE 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 UE 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 UE Furniture i.e., UE Furniture and Qumei Furniture go up and down completely randomly.
Pair Corralation between UE Furniture and Qumei Furniture
Assuming the 90 days trading horizon UE Furniture Co is expected to under-perform the Qumei Furniture. But the stock apears to be less risky and, when comparing its historical volatility, UE Furniture Co is 1.49 times less risky than Qumei Furniture. The stock trades about -0.09 of its potential returns per unit of risk. The Qumei Furniture Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Qumei Furniture Group on September 5, 2024 and sell it today you would earn a total of 39.00 from holding Qumei Furniture Group or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
UE Furniture Co vs. Qumei Furniture Group
Performance |
| Timeline |
| UE Furniture |
| Qumei Furniture Group |
UE Furniture and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Qumei Furniture
The main advantage of trading using opposite UE Furniture and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE 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.| UE Furniture vs. Nanjing Putian Telecommunications | UE Furniture vs. Kangyue Technology Co | UE Furniture vs. Shenzhen Hifuture Electric | UE Furniture vs. Tianjin Realty Development |
| Qumei Furniture vs. Ningbo Thermal Power | Qumei Furniture vs. Shenyang Huitian Thermal | Qumei Furniture vs. Minmetals Capital Co | Qumei Furniture vs. Beijing HuaYuanYiTong Thermal |
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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