Correlation Between D MARKET and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both D MARKET 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 D MARKET and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between D MARKET Electronic Services and Qurate Retail Series, you can compare the effects of market volatilities on D MARKET 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 D MARKET with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of D MARKET and Qurate Retail.
Diversification Opportunities for D MARKET and Qurate Retail
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEPS and Qurate is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding D MARKET Electronic Services and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and D MARKET 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 D MARKET Electronic Services 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 Series has no effect on the direction of D MARKET i.e., D MARKET and Qurate Retail go up and down completely randomly.
Pair Corralation between D MARKET and Qurate Retail
Given the investment horizon of 90 days D MARKET Electronic Services is expected to generate 0.84 times more return on investment than Qurate Retail. However, D MARKET Electronic Services is 1.2 times less risky than Qurate Retail. It trades about 0.08 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.01 per unit of risk. If you would invest 105.00 in D MARKET Electronic Services on August 27, 2024 and sell it today you would earn a total of 176.00 from holding D MARKET Electronic Services or generate 167.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
D MARKET Electronic Services vs. Qurate Retail Series
Performance |
| Timeline |
| D MARKET Electronic |
| Qurate Retail Series |
D MARKET and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with D MARKET and Qurate Retail
The main advantage of trading using opposite D MARKET and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D MARKET 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.The idea behind D MARKET Electronic Services and Qurate Retail Series 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.| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Hour Loop | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Liquidity Services |
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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