Correlation Between Qtone Education and Xinya Electronic

Can any of the company-specific risk be diversified away by investing in both Qtone Education and Xinya Electronic 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 Qtone Education and Xinya Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qtone Education Group and Xinya Electronic Co, you can compare the effects of market volatilities on Qtone Education and Xinya Electronic 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 Qtone Education with a short position of Xinya Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qtone Education and Xinya Electronic.

Diversification Opportunities for Qtone Education and Xinya Electronic

-0.28

Correlation Coefficient

Qtone Education  Xinya Electronic

Very good diversification

The 3 months correlation between Qtone and Xinya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Qtone Education Group and Xinya Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinya Electronic and Qtone Education 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 Qtone Education Group are associated (or correlated) with Xinya Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinya Electronic has no effect on the direction of Qtone Education i.e., Qtone Education and Xinya Electronic go up and down completely randomly.

Pair Corralation between Qtone Education and Xinya Electronic

Assuming the 90 days trading horizon Qtone Education Group is expected to under-perform the Xinya Electronic. In addition to that, Qtone Education is 1.08 times more volatile than Xinya Electronic Co. It trades about -0.08 of its total potential returns per unit of risk. Xinya Electronic Co is currently generating about 0.11 per unit of volatility. If you would invest  1,346  in Xinya Electronic Co on October 25, 2024 and sell it today you would earn a total of  302.00  from holding Xinya Electronic Co or generate 22.44% return on investment over 90 days.

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

Qtone Education Group  vs.  Xinya Electronic Co

Qtone Education Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qtone Education Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Xinya Electronic

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xinya Electronic Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xinya Electronic sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qtone Education and Xinya Electronic

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

The idea behind Qtone Education Group and Xinya Electronic Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.