Correlation Between Qudian and Encore Capital
Can any of the company-specific risk be diversified away by investing in both Qudian and Encore Capital 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 Encore Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Encore Capital Group, you can compare the effects of market volatilities on Qudian and Encore Capital 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 Encore Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Encore Capital.
Diversification Opportunities for Qudian and Encore Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Qudian and Encore is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Encore Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encore Capital Group 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 Encore Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encore Capital Group has no effect on the direction of Qudian i.e., Qudian and Encore Capital go up and down completely randomly.
Pair Corralation between Qudian and Encore Capital
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 3.47 times more return on investment than Encore Capital. However, Qudian is 3.47 times more volatile than Encore Capital Group. It trades about 0.17 of its potential returns per unit of risk. Encore Capital Group is currently generating about 0.14 per unit of risk. If you would invest 220.00 in Qudian Inc on September 3, 2024 and sell it today you would earn a total of 94.00 from holding Qudian Inc or generate 42.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. Encore Capital Group
Performance |
| Timeline |
| Qudian Inc |
| Encore Capital Group |
Qudian and Encore Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Encore Capital
The main advantage of trading using opposite Qudian and Encore Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, Encore Capital 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 Encore Capital will offset losses from the drop in Encore Capital's long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |