Correlation Between Dada Nexus and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Dada Nexus and Qurate Retail 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 Dada Nexus and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dada Nexus and Qurate Retail, you can compare the effects of market volatilities on Dada Nexus and Qurate Retail 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 Dada Nexus with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dada Nexus and Qurate Retail.
Diversification Opportunities for Dada Nexus and Qurate Retail
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dada and Qurate is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dada Nexus and Qurate Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail and Dada Nexus 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 Dada Nexus are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail has no effect on the direction of Dada Nexus i.e., Dada Nexus and Qurate Retail go up and down completely randomly.
Pair Corralation between Dada Nexus and Qurate Retail
Given the investment horizon of 90 days Dada Nexus is expected to under-perform the Qurate Retail. In addition to that, Dada Nexus is 2.59 times more volatile than Qurate Retail. It trades about -0.13 of its total potential returns per unit of risk. Qurate Retail is currently generating about 0.03 per unit of volatility. If you would invest 3,955 in Qurate Retail on August 24, 2024 and sell it today you would earn a total of 45.00 from holding Qurate Retail or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dada Nexus vs. Qurate Retail
Performance |
| Timeline |
| Dada Nexus |
| Qurate Retail |
Dada Nexus and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dada Nexus and Qurate Retail
The main advantage of trading using opposite Dada Nexus and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dada Nexus position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
| Qurate Retail vs. Qurate Retail Series | Qurate Retail vs. Qurate Retail Series | Qurate Retail vs. RLJ Lodging Trust | Qurate Retail vs. Liberty Broadband Srs |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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