Correlation Between Braze and Quhuo
Can any of the company-specific risk be diversified away by investing in both Braze and Quhuo 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 Braze and Quhuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braze Inc and Quhuo, you can compare the effects of market volatilities on Braze and Quhuo 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 Braze with a short position of Quhuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braze and Quhuo.
Diversification Opportunities for Braze and Quhuo
Pay attention - limited upside
The 3 months correlation between Braze and Quhuo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo and Braze 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 Braze Inc are associated (or correlated) with Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Braze i.e., Braze and Quhuo go up and down completely randomly.
Pair Corralation between Braze and Quhuo
Given the investment horizon of 90 days Braze Inc is expected to generate 0.84 times more return on investment than Quhuo. However, Braze Inc is 1.19 times less risky than Quhuo. It trades about 0.38 of its potential returns per unit of risk. Quhuo is currently generating about -0.07 per unit of risk. If you would invest 3,200 in Braze Inc on August 31, 2024 and sell it today you would earn a total of 682.00 from holding Braze Inc or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braze Inc vs. Quhuo
Performance |
| Timeline |
| Braze Inc |
| Quhuo |
Braze and Quhuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braze and Quhuo
The main advantage of trading using opposite Braze and Quhuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braze position performs unexpectedly, Quhuo 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 Quhuo will offset losses from the drop in Quhuo's long position.The idea behind Braze Inc and Quhuo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Quhuo vs. Sentage Holdings | Quhuo vs. Lixiang Education Holding | Quhuo vs. Huadi International Group | Quhuo vs. Baosheng Media Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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