Correlation Between Associates First and Qudian
Can any of the company-specific risk be diversified away by investing in both Associates First and Qudian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Associates First and Qudian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associates First Capital and Qudian Inc, you can compare the effects of market volatilities on Associates First and Qudian 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 Associates First with a short position of Qudian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associates First and Qudian.
Diversification Opportunities for Associates First and Qudian
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Associates and Qudian is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Associates First Capital and Qudian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qudian Inc and Associates First 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 Associates First Capital are associated (or correlated) with Qudian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qudian Inc has no effect on the direction of Associates First i.e., Associates First and Qudian go up and down completely randomly.
Pair Corralation between Associates First and Qudian
Given the investment horizon of 90 days Associates First Capital is expected to generate 15.95 times more return on investment than Qudian. However, Associates First is 15.95 times more volatile than Qudian Inc. It trades about 0.05 of its potential returns per unit of risk. Qudian Inc is currently generating about 0.03 per unit of risk. If you would invest 0.01 in Associates First Capital on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Associates First Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Associates First Capital vs. Qudian Inc
Performance |
| Timeline |
| Associates First Capital |
| Qudian Inc |
Associates First and Qudian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associates First and Qudian
The main advantage of trading using opposite Associates First and Qudian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associates First position performs unexpectedly, Qudian 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 Qudian will offset losses from the drop in Qudian's long position.| Associates First vs. Visa Class A | Associates First vs. Mastercard | Associates First vs. American Express | Associates First vs. PayPal Holdings |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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