Correlation Between Quhuo and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Quhuo and Firan Technology 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 Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quhuo and Firan Technology Group, you can compare the effects of market volatilities on Quhuo and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quhuo and Firan Technology.
Diversification Opportunities for Quhuo and Firan Technology
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Quhuo and Firan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Quhuo i.e., Quhuo and Firan Technology go up and down completely randomly.
Pair Corralation between Quhuo and Firan Technology
Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the Firan Technology. In addition to that, Quhuo is 1.89 times more volatile than Firan Technology Group. It trades about -0.09 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.16 per unit of volatility. If you would invest 504.00 in Firan Technology Group on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Firan Technology Group or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quhuo vs. Firan Technology Group
Performance |
| Timeline |
| Quhuo |
| Firan Technology |
Quhuo and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quhuo and Firan Technology
The main advantage of trading using opposite Quhuo and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quhuo position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.The idea behind Quhuo and Firan Technology Group 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.| Firan Technology vs. 808 Renewable Energy | Firan Technology vs. Austal Limited | Firan Technology vs. Sky Harbour Group | Firan Technology vs. CPI Aerostructures |
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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