Correlation Between Quhuo and PC Connection

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Can any of the company-specific risk be diversified away by investing in both Quhuo and PC Connection 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 Quhuo and PC Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quhuo and PC Connection, you can compare the effects of market volatilities on Quhuo and PC Connection 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 Quhuo with a short position of PC Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quhuo and PC Connection.

Diversification Opportunities for Quhuo and PC Connection

QuhuoCNXNDiversified AwayQuhuoCNXNDiversified Away100%
0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Quhuo and CNXN is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and PC Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PC Connection and Quhuo 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 Quhuo are associated (or correlated) with PC Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PC Connection has no effect on the direction of Quhuo i.e., Quhuo and PC Connection go up and down completely randomly.

Pair Corralation between Quhuo and PC Connection

Allowing for the 90-day total investment horizon Quhuo is expected to generate 0.73 times more return on investment than PC Connection. However, Quhuo is 1.38 times less risky than PC Connection. It trades about 0.14 of its potential returns per unit of risk. PC Connection is currently generating about -0.19 per unit of risk. If you would invest  141.00  in Quhuo on November 27, 2024 and sell it today you would earn a total of  8.00  from holding Quhuo or generate 5.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Quhuo  vs.  PC Connection

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15QH CNXN
       Timeline  
Quhuo 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical indicators, Quhuo may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.251.31.351.41.451.51.55
PC Connection 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PC Connection has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb64666870727476

Quhuo and PC Connection Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.66-5.74-3.82-1.890.01.963.986.08.0310.05 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15QH CNXN
       Returns  

Pair Trading with Quhuo and PC Connection

The main advantage of trading using opposite Quhuo and PC Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quhuo position performs unexpectedly, PC Connection 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 PC Connection will offset losses from the drop in PC Connection's long position.
The idea behind Quhuo and PC Connection 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.
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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