Correlation Between Qumei Furniture and Huaibei Mining
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By analyzing existing cross correlation between Qumei Furniture Group and Huaibei Mining Holdings, you can compare the effects of market volatilities on Qumei Furniture and Huaibei Mining 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 Huaibei Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Huaibei Mining.
Diversification Opportunities for Qumei Furniture and Huaibei Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qumei and Huaibei is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Huaibei Mining Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaibei Mining Holdings 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 Huaibei Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaibei Mining Holdings has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Huaibei Mining go up and down completely randomly.
Pair Corralation between Qumei Furniture and Huaibei Mining
Assuming the 90 days trading horizon Qumei Furniture Group is expected to generate 1.89 times more return on investment than Huaibei Mining. However, Qumei Furniture is 1.89 times more volatile than Huaibei Mining Holdings. It trades about 0.14 of its potential returns per unit of risk. Huaibei Mining Holdings is currently generating about 0.19 per unit of risk. If you would invest 255.00 in Qumei Furniture Group on November 6, 2024 and sell it today you would earn a total of 15.00 from holding Qumei Furniture Group or generate 5.88% 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. Huaibei Mining Holdings
Performance |
| Timeline |
| Qumei Furniture Group |
| Huaibei Mining Holdings |
Qumei Furniture and Huaibei Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qumei Furniture and Huaibei Mining
The main advantage of trading using opposite Qumei Furniture and Huaibei Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Huaibei Mining 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 Huaibei Mining will offset losses from the drop in Huaibei Mining's long position.| Qumei Furniture vs. Guangdong Sunwill Precising | Qumei Furniture vs. Zhejiang Construction Investment | Qumei Furniture vs. Ningbo Tip Rubber | Qumei Furniture vs. Beijing Mainstreets Investment |
| Huaibei Mining vs. Jahen Household Products | Huaibei Mining vs. Ningxia Younglight Chemicals | Huaibei Mining vs. Hangzhou Gisway Information | Huaibei Mining vs. Digital China Information |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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