Correlation Between Qumei Furniture and Shandong Sanyuan
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By analyzing existing cross correlation between Qumei Furniture Group and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Qumei Furniture and Shandong Sanyuan 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 Qumei Furniture with a short position of Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Shandong Sanyuan.
Diversification Opportunities for Qumei Furniture and Shandong Sanyuan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qumei and Shandong is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio and Qumei 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 Qumei Furniture Group are associated (or correlated) with Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Qumei Furniture and Shandong Sanyuan
Assuming the 90 days trading horizon Qumei Furniture Group is expected to under-perform the Shandong Sanyuan. In addition to that, Qumei Furniture is 1.34 times more volatile than Shandong Sanyuan Biotechnology. It trades about -0.22 of its total potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about -0.04 per unit of volatility. If you would invest 2,635 in Shandong Sanyuan Biotechnology on October 24, 2024 and sell it today you would lose (55.00) from holding Shandong Sanyuan Biotechnology or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qumei Furniture Group vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Qumei Furniture Group |
| Shandong Sanyuan Bio |
Qumei Furniture and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qumei Furniture and Shandong Sanyuan
The main advantage of trading using opposite Qumei Furniture and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Shandong Sanyuan 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 Shandong Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.| Qumei Furniture vs. Shandong Sanyuan Biotechnology | Qumei Furniture vs. Sichuan Hebang Biotechnology | Qumei Furniture vs. Zotye Automobile Co | Qumei Furniture vs. Guangdong Marubi Biotechnology |
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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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