Correlation Between Infobird and Quhuo
Can any of the company-specific risk be diversified away by investing in both Infobird 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 Infobird and Quhuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infobird Co and Quhuo, you can compare the effects of market volatilities on Infobird 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 Infobird with a short position of Quhuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infobird and Quhuo.
Diversification Opportunities for Infobird and Quhuo
Very weak diversification
The 3 months correlation between Infobird and Quhuo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Infobird Co and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo and Infobird 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 Infobird Co 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 Infobird i.e., Infobird and Quhuo go up and down completely randomly.
Pair Corralation between Infobird and Quhuo
Given the investment horizon of 90 days Infobird Co is expected to under-perform the Quhuo. But the stock apears to be less risky and, when comparing its historical volatility, Infobird Co is 1.32 times less risky than Quhuo. The stock trades about -0.04 of its potential returns per unit of risk. The Quhuo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 143.00 in Quhuo on August 27, 2024 and sell it today you would lose (8.00) from holding Quhuo or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infobird Co vs. Quhuo
Performance |
| Timeline |
| Infobird |
| Quhuo |
Infobird and Quhuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infobird and Quhuo
The main advantage of trading using opposite Infobird and Quhuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infobird 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 Infobird Co 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.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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