Correlation Between Qingling Motors and Wabash National
Can any of the company-specific risk be diversified away by investing in both Qingling Motors and Wabash National 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 Qingling Motors and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingling Motors Co and Wabash National, you can compare the effects of market volatilities on Qingling Motors and Wabash National 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 Qingling Motors with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingling Motors and Wabash National.
Diversification Opportunities for Qingling Motors and Wabash National
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Qingling and Wabash is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Qingling Motors Co and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and Qingling Motors 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 Qingling Motors Co are associated (or correlated) with Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Qingling Motors i.e., Qingling Motors and Wabash National go up and down completely randomly.
Pair Corralation between Qingling Motors and Wabash National
Assuming the 90 days horizon Qingling Motors Co is expected to generate 0.84 times more return on investment than Wabash National. However, Qingling Motors Co is 1.19 times less risky than Wabash National. It trades about 0.06 of its potential returns per unit of risk. Wabash National is currently generating about -0.03 per unit of risk. If you would invest 5.82 in Qingling Motors Co on October 15, 2024 and sell it today you would earn a total of 0.34 from holding Qingling Motors Co or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingling Motors Co vs. Wabash National
Performance |
| Timeline |
| Qingling Motors |
| Wabash National |
Qingling Motors and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingling Motors and Wabash National
The main advantage of trading using opposite Qingling Motors and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingling Motors position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| Qingling Motors vs. Performance Food Group | Qingling Motors vs. MOLSON RS BEVERAGE | Qingling Motors vs. BROADWIND ENRGY | Qingling Motors vs. TRAINLINE PLC LS |
| Wabash National vs. Q2M Managementberatung AG | Wabash National vs. Tower Semiconductor | Wabash National vs. Semiconductor Manufacturing International | Wabash National vs. Cal Maine Foods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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