Correlation Between Qiming Information and Nanjing OLO

Can any of the company-specific risk be diversified away by investing in both Qiming Information and Nanjing OLO 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 Qiming Information and Nanjing OLO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qiming Information Technology and Nanjing OLO Home, you can compare the effects of market volatilities on Qiming Information and Nanjing OLO 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 Qiming Information with a short position of Nanjing OLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qiming Information and Nanjing OLO.

Diversification Opportunities for Qiming Information and Nanjing OLO

0.52

Correlation Coefficient

Qiming Information  Nanjing OLO

Very weak diversification

The 3 months correlation between Qiming and Nanjing is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Qiming Information Technology and Nanjing OLO Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing OLO Home and Qiming Information 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 Qiming Information Technology are associated (or correlated) with Nanjing OLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing OLO Home has no effect on the direction of Qiming Information i.e., Qiming Information and Nanjing OLO go up and down completely randomly.

Pair Corralation between Qiming Information and Nanjing OLO

Assuming the 90 days trading horizon Qiming Information Technology is expected to under-perform the Nanjing OLO. But the stock apears to be less risky and, when comparing its historical volatility, Qiming Information Technology is 1.09 times less risky than Nanjing OLO. The stock trades about -0.35 of its potential returns per unit of risk. The Nanjing OLO Home is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  686.00  in Nanjing OLO Home on October 11, 2024 and sell it today you would lose (96.00) from holding Nanjing OLO Home or give up 13.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Qiming Information Technology  vs.  Nanjing OLO Home

Qiming Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qiming Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Qiming Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nanjing OLO Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanjing OLO Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nanjing OLO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qiming Information and Nanjing OLO

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

The idea behind Qiming Information Technology and Nanjing OLO Home 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.