Correlation Between Qumei Furniture and Fangda Special
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By analyzing existing cross correlation between Qumei Furniture Group and Fangda Special Steel, you can compare the effects of market volatilities on Qumei Furniture and Fangda Special 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 Fangda Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Fangda Special.
Diversification Opportunities for Qumei Furniture and Fangda Special
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qumei and Fangda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Fangda Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangda Special Steel 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 Fangda Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangda Special Steel has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Fangda Special go up and down completely randomly.
Pair Corralation between Qumei Furniture and Fangda Special
Assuming the 90 days trading horizon Qumei Furniture Group is expected to under-perform the Fangda Special. But the stock apears to be less risky and, when comparing its historical volatility, Qumei Furniture Group is 1.1 times less risky than Fangda Special. The stock trades about -0.05 of its potential returns per unit of risk. The Fangda Special Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 409.00 in Fangda Special Steel on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Fangda Special Steel or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qumei Furniture Group vs. Fangda Special Steel
Performance |
| Timeline |
| Qumei Furniture Group |
| Fangda Special Steel |
Qumei Furniture and Fangda Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qumei Furniture and Fangda Special
The main advantage of trading using opposite Qumei Furniture and Fangda Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Fangda Special 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 Fangda Special will offset losses from the drop in Fangda Special's long position.| Qumei Furniture vs. Cloud Live Technology | Qumei Furniture vs. Nanjing Putian Telecommunications | Qumei Furniture vs. Shenzhen Coship Electronics | Qumei Furniture vs. Shenzhen Hifuture Electric |
| Fangda Special vs. Guangdong Wens Foodstuff | Fangda Special vs. Guangdong Liantai Environmental | Fangda Special vs. Anji Foodstuff Co | Fangda Special vs. Muyuan Foodstuff 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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