Correlation Between Qudian and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Qudian and AFC Gamma 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 Qudian and AFC Gamma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and AFC Gamma, you can compare the effects of market volatilities on Qudian and AFC Gamma 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 Qudian with a short position of AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and AFC Gamma.
Diversification Opportunities for Qudian and AFC Gamma
Good diversification
The 3 months correlation between Qudian and AFC is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma and Qudian 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 Qudian Inc are associated (or correlated) with AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Qudian i.e., Qudian and AFC Gamma go up and down completely randomly.
Pair Corralation between Qudian and AFC Gamma
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 1.9 times more return on investment than AFC Gamma. However, Qudian is 1.9 times more volatile than AFC Gamma. It trades about 0.06 of its potential returns per unit of risk. AFC Gamma is currently generating about 0.02 per unit of risk. If you would invest 136.00 in Qudian Inc on November 2, 2024 and sell it today you would earn a total of 159.50 from holding Qudian Inc or generate 117.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. AFC Gamma
Performance |
| Timeline |
| Qudian Inc |
| AFC Gamma |
Qudian and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and AFC Gamma
The main advantage of trading using opposite Qudian and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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