Correlation Between Qurate Retail and Meituan
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Meituan 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 Qurate Retail and Meituan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Meituan, you can compare the effects of market volatilities on Qurate Retail and Meituan 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 Qurate Retail with a short position of Meituan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Meituan.
Diversification Opportunities for Qurate Retail and Meituan
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qurate and Meituan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Meituan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meituan and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Meituan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meituan has no effect on the direction of Qurate Retail i.e., Qurate Retail and Meituan go up and down completely randomly.
Pair Corralation between Qurate Retail and Meituan
Assuming the 90 days horizon Qurate Retail Series is expected to generate 1.56 times more return on investment than Meituan. However, Qurate Retail is 1.56 times more volatile than Meituan. It trades about -0.13 of its potential returns per unit of risk. Meituan is currently generating about -0.21 per unit of risk. If you would invest 348.00 in Qurate Retail Series on August 29, 2024 and sell it today you would lose (61.00) from holding Qurate Retail Series or give up 17.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail Series vs. Meituan
Performance |
| Timeline |
| Qurate Retail Series |
| Meituan |
Qurate Retail and Meituan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Meituan
The main advantage of trading using opposite Qurate Retail and Meituan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Meituan 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 Meituan will offset losses from the drop in Meituan's long position.| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Newegg Commerce | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Natural Health Trend |
| Meituan vs. 1StdibsCom | Meituan vs. Natural Health Trend | Meituan vs. Hour Loop | Meituan vs. Liquidity Services |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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