Correlation Between Fanhua and Q2M Managementberatu
Can any of the company-specific risk be diversified away by investing in both Fanhua and Q2M Managementberatu 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 Fanhua and Q2M Managementberatu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fanhua Inc and Q2M Managementberatung AG, you can compare the effects of market volatilities on Fanhua and Q2M Managementberatu 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 Fanhua with a short position of Q2M Managementberatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fanhua and Q2M Managementberatu.
Diversification Opportunities for Fanhua and Q2M Managementberatu
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fanhua and Q2M is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fanhua Inc and Q2M Managementberatung AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2M Managementberatung and Fanhua 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 Fanhua Inc are associated (or correlated) with Q2M Managementberatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2M Managementberatung has no effect on the direction of Fanhua i.e., Fanhua and Q2M Managementberatu go up and down completely randomly.
Pair Corralation between Fanhua and Q2M Managementberatu
Assuming the 90 days trading horizon Fanhua Inc is expected to under-perform the Q2M Managementberatu. In addition to that, Fanhua is 6.49 times more volatile than Q2M Managementberatung AG. It trades about -0.08 of its total potential returns per unit of risk. Q2M Managementberatung AG is currently generating about -0.04 per unit of volatility. If you would invest 105.00 in Q2M Managementberatung AG on October 11, 2024 and sell it today you would lose (15.00) from holding Q2M Managementberatung AG or give up 14.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Fanhua Inc vs. Q2M Managementberatung AG
Performance |
Timeline |
Fanhua Inc |
Q2M Managementberatung |
Fanhua and Q2M Managementberatu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fanhua and Q2M Managementberatu
The main advantage of trading using opposite Fanhua and Q2M Managementberatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fanhua position performs unexpectedly, Q2M Managementberatu 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 Q2M Managementberatu will offset losses from the drop in Q2M Managementberatu's long position.Fanhua vs. Q2M Managementberatung AG | Fanhua vs. CeoTronics AG | Fanhua vs. Ares Management Corp | Fanhua vs. VITEC SOFTWARE GROUP |
Q2M Managementberatu vs. BE Semiconductor Industries | Q2M Managementberatu vs. Xenia Hotels Resorts | Q2M Managementberatu vs. Sunstone Hotel Investors | Q2M Managementberatu vs. Magnachip Semiconductor |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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