Correlation Between Queclink Wireless and Shandong Mining

Can any of the company-specific risk be diversified away by investing in both Queclink Wireless and Shandong Mining 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 Queclink Wireless and Shandong Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Queclink Wireless Solutions and Shandong Mining Machinery, you can compare the effects of market volatilities on Queclink Wireless and Shandong Mining 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 Queclink Wireless with a short position of Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queclink Wireless and Shandong Mining.

Diversification Opportunities for Queclink Wireless and Shandong Mining

0.42

Correlation Coefficient

Queclink Wireless  Shandong Mining

Very weak diversification

The 3 months correlation between Queclink and Shandong is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Queclink Wireless Solutions and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery and Queclink Wireless 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 Queclink Wireless Solutions are associated (or correlated) with Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Queclink Wireless i.e., Queclink Wireless and Shandong Mining go up and down completely randomly.

Pair Corralation between Queclink Wireless and Shandong Mining

Assuming the 90 days trading horizon Queclink Wireless Solutions is expected to generate 0.75 times more return on investment than Shandong Mining. However, Queclink Wireless Solutions is 1.33 times less risky than Shandong Mining. It trades about 0.04 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.0 per unit of risk. If you would invest  1,474  in Queclink Wireless Solutions on December 3, 2024 and sell it today you would earn a total of  65.00  from holding Queclink Wireless Solutions or generate 4.41% return on investment over 90 days.

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

Queclink Wireless Solutions  vs.  Shandong Mining Machinery

Queclink Wireless

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Queclink Wireless Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queclink Wireless may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Shandong Mining Machinery

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Queclink Wireless and Shandong Mining

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

The idea behind Queclink Wireless Solutions and Shandong Mining Machinery 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.