Correlation Between Qumei Furniture and Wuhan Xianglong
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By analyzing existing cross correlation between Qumei Furniture Group and Wuhan Xianglong Power, you can compare the effects of market volatilities on Qumei Furniture and Wuhan Xianglong 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 Wuhan Xianglong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Wuhan Xianglong.
Diversification Opportunities for Qumei Furniture and Wuhan Xianglong
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qumei and Wuhan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Wuhan Xianglong Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Xianglong Power 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 Wuhan Xianglong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Xianglong Power has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Wuhan Xianglong go up and down completely randomly.
Pair Corralation between Qumei Furniture and Wuhan Xianglong
Assuming the 90 days trading horizon Qumei Furniture Group is expected to generate 1.38 times more return on investment than Wuhan Xianglong. However, Qumei Furniture is 1.38 times more volatile than Wuhan Xianglong Power. It trades about 0.2 of its potential returns per unit of risk. Wuhan Xianglong Power is currently generating about 0.2 per unit of risk. If you would invest 270.00 in Qumei Furniture Group on November 27, 2024 and sell it today you would earn a total of 26.00 from holding Qumei Furniture Group or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qumei Furniture Group vs. Wuhan Xianglong Power
Performance |
| Timeline |
| Qumei Furniture Group |
| Wuhan Xianglong Power |
Qumei Furniture and Wuhan Xianglong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qumei Furniture and Wuhan Xianglong
The main advantage of trading using opposite Qumei Furniture and Wuhan Xianglong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Wuhan Xianglong 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 Wuhan Xianglong will offset losses from the drop in Wuhan Xianglong's long position.| Qumei Furniture vs. Shuhua Sports Co | Qumei Furniture vs. Ningxia Xiaoming Agriculture | Qumei Furniture vs. Shenzhen Urban Transport | Qumei Furniture vs. Zhejiang Yinlun Machinery |
| Wuhan Xianglong vs. Shenzhen Noposion Agrochemicals | Wuhan Xianglong vs. Jiangsu GDK Biotechnology | Wuhan Xianglong vs. Hefei Metalforming Mach | Wuhan Xianglong vs. Liaoning Chengda Biotechnology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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