Correlation Between X Financial and Qudian
Can any of the company-specific risk be diversified away by investing in both X Financial and Qudian 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 X Financial and Qudian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Financial Class and Qudian Inc, you can compare the effects of market volatilities on X Financial and Qudian 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 X Financial with a short position of Qudian. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and Qudian.
Diversification Opportunities for X Financial and Qudian
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XYF and Qudian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Qudian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qudian Inc and X Financial 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 X Financial Class are associated (or correlated) with Qudian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qudian Inc has no effect on the direction of X Financial i.e., X Financial and Qudian go up and down completely randomly.
Pair Corralation between X Financial and Qudian
Considering the 90-day investment horizon X Financial Class is expected to generate 0.76 times more return on investment than Qudian. However, X Financial Class is 1.32 times less risky than Qudian. It trades about -0.03 of its potential returns per unit of risk. Qudian Inc is currently generating about -0.11 per unit of risk. If you would invest 662.00 in X Financial Class on August 28, 2024 and sell it today you would lose (12.00) from holding X Financial Class or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Financial Class vs. Qudian Inc
Performance |
| Timeline |
| X Financial Class |
| Qudian Inc |
X Financial and Qudian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Financial and Qudian
The main advantage of trading using opposite X Financial and Qudian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial position performs unexpectedly, Qudian 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 Qudian will offset losses from the drop in Qudian's long position.| X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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