Correlation Between Qudian and WhiteHorse Finance
Can any of the company-specific risk be diversified away by investing in both Qudian and WhiteHorse Finance 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 WhiteHorse Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and WhiteHorse Finance, you can compare the effects of market volatilities on Qudian and WhiteHorse Finance 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 WhiteHorse Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and WhiteHorse Finance.
Diversification Opportunities for Qudian and WhiteHorse Finance
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qudian and WhiteHorse is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and WhiteHorse Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WhiteHorse Finance 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 WhiteHorse Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WhiteHorse Finance has no effect on the direction of Qudian i.e., Qudian and WhiteHorse Finance go up and down completely randomly.
Pair Corralation between Qudian and WhiteHorse Finance
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 2.81 times more return on investment than WhiteHorse Finance. However, Qudian is 2.81 times more volatile than WhiteHorse Finance. It trades about 0.13 of its potential returns per unit of risk. WhiteHorse Finance is currently generating about 0.31 per unit of risk. If you would invest 280.00 in Qudian Inc on November 2, 2024 and sell it today you would earn a total of 17.00 from holding Qudian Inc or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. WhiteHorse Finance
Performance |
| Timeline |
| Qudian Inc |
| WhiteHorse Finance |
Qudian and WhiteHorse Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and WhiteHorse Finance
The main advantage of trading using opposite Qudian and WhiteHorse Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, WhiteHorse Finance 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 WhiteHorse Finance will offset losses from the drop in WhiteHorse Finance's long position.The idea behind Qudian Inc and WhiteHorse Finance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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