Correlation Between Qudian and Sentage Holdings
Can any of the company-specific risk be diversified away by investing in both Qudian and Sentage 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 Sentage 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 Sentage Holdings, you can compare the effects of market volatilities on Qudian and Sentage 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 Sentage Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Sentage Holdings.
Diversification Opportunities for Qudian and Sentage Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Qudian and Sentage is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Sentage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentage 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 Sentage Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentage Holdings has no effect on the direction of Qudian i.e., Qudian and Sentage Holdings go up and down completely randomly.
Pair Corralation between Qudian and Sentage Holdings
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 1.2 times more return on investment than Sentage Holdings. However, Qudian is 1.2 times more volatile than Sentage Holdings. It trades about 0.18 of its potential returns per unit of risk. Sentage Holdings is currently generating about -0.42 per unit of risk. If you would invest 226.00 in Qudian Inc on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Qudian Inc or generate 9.73% 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. Sentage Holdings
Performance |
| Timeline |
| Qudian Inc |
| Sentage Holdings |
Qudian and Sentage Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Sentage Holdings
The main advantage of trading using opposite Qudian and Sentage Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, Sentage 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 Sentage Holdings will offset losses from the drop in Sentage Holdings' long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| Sentage Holdings vs. Yirendai | Sentage Holdings vs. Lexinfintech Holdings | Sentage Holdings vs. Lufax Holding | Sentage Holdings vs. X Financial Class |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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