Correlation Between Qudian and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Qudian and OneMain Holdings 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 OneMain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and OneMain Holdings, you can compare the effects of market volatilities on Qudian and OneMain Holdings 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 OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and OneMain Holdings.
Diversification Opportunities for Qudian and OneMain Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qudian and OneMain is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain 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 OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Qudian i.e., Qudian and OneMain Holdings go up and down completely randomly.
Pair Corralation between Qudian and OneMain Holdings
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 2.27 times more return on investment than OneMain Holdings. However, Qudian is 2.27 times more volatile than OneMain Holdings. It trades about -0.04 of its potential returns per unit of risk. OneMain Holdings is currently generating about -0.16 per unit of risk. If you would invest 298.00 in Qudian Inc on November 27, 2024 and sell it today you would lose (16.00) from holding Qudian Inc or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. OneMain Holdings
Performance |
| Timeline |
| Qudian Inc |
| OneMain Holdings |
Qudian and OneMain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and OneMain Holdings
The main advantage of trading using opposite Qudian and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, OneMain Holdings 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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