Correlation Between Qudian and SK Growth
Can any of the company-specific risk be diversified away by investing in both Qudian and SK Growth 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 SK Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and SK Growth Opportunities, you can compare the effects of market volatilities on Qudian and SK Growth 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 SK Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and SK Growth.
Diversification Opportunities for Qudian and SK Growth
Poor diversification
The 3 months correlation between Qudian and SKGR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and SK Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Growth Opportunities 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 SK Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Growth Opportunities has no effect on the direction of Qudian i.e., Qudian and SK Growth go up and down completely randomly.
Pair Corralation between Qudian and SK Growth
If you would invest 294.00 in Qudian Inc on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Qudian Inc or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. SK Growth Opportunities
Performance |
| Timeline |
| Qudian Inc |
| SK Growth Opportunities |
Qudian and SK Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and SK Growth
The main advantage of trading using opposite Qudian and SK Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, SK Growth 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 SK Growth will offset losses from the drop in SK Growth's 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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