Correlation Between Qudian and Cosmos Group
Can any of the company-specific risk be diversified away by investing in both Qudian and Cosmos Group 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 Cosmos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Cosmos Group Holdings, you can compare the effects of market volatilities on Qudian and Cosmos Group 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 Cosmos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Cosmos Group.
Diversification Opportunities for Qudian and Cosmos Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qudian and Cosmos is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Cosmos Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos Group Holdings 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 Cosmos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Group Holdings has no effect on the direction of Qudian i.e., Qudian and Cosmos Group go up and down completely randomly.
Pair Corralation between Qudian and Cosmos Group
Allowing for the 90-day total investment horizon Qudian is expected to generate 188.63 times less return on investment than Cosmos Group. But when comparing it to its historical volatility, Qudian Inc is 118.9 times less risky than Cosmos Group. It trades about 0.18 of its potential returns per unit of risk. Cosmos Group Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Cosmos Group Holdings on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Cosmos Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Qudian Inc vs. Cosmos Group Holdings
Performance |
| Timeline |
| Qudian Inc |
| Cosmos Group Holdings |
Qudian and Cosmos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Cosmos Group
The main advantage of trading using opposite Qudian and Cosmos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, Cosmos Group 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 Cosmos Group will offset losses from the drop in Cosmos Group's long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| Cosmos Group vs. Zip Co Limited | Cosmos Group vs. Regional Management Corp | Cosmos Group vs. Enova International | Cosmos Group vs. Open Lending Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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