Correlation Between Shandong Publishing and Qilu Bank

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

By analyzing existing cross correlation between Shandong Publishing Media and Qilu Bank Co, you can compare the effects of market volatilities on Shandong Publishing and Qilu Bank 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 Shandong Publishing with a short position of Qilu Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Publishing and Qilu Bank.

Diversification Opportunities for Shandong Publishing and Qilu Bank

-0.67

Correlation Coefficient

Shandong Publishing  Qilu Bank

Excellent diversification

The 3 months correlation between Shandong and Qilu is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Publishing Media and Qilu Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilu Bank and Shandong Publishing 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 Shandong Publishing Media are associated (or correlated) with Qilu Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilu Bank has no effect on the direction of Shandong Publishing i.e., Shandong Publishing and Qilu Bank go up and down completely randomly.

Pair Corralation between Shandong Publishing and Qilu Bank

Assuming the 90 days trading horizon Shandong Publishing Media is expected to under-perform the Qilu Bank. In addition to that, Shandong Publishing is 1.01 times more volatile than Qilu Bank Co. It trades about -0.15 of its total potential returns per unit of risk. Qilu Bank Co is currently generating about 0.13 per unit of volatility. If you would invest  528.00  in Qilu Bank Co on December 24, 2024 and sell it today you would earn a total of  68.00  from holding Qilu Bank Co or generate 12.88% return on investment over 90 days.

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

Shandong Publishing Media  vs.  Qilu Bank Co

Shandong Publishing Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shandong Publishing Media 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Qilu Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qilu Bank Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qilu Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shandong Publishing and Qilu Bank

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

The idea behind Shandong Publishing Media and Qilu Bank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.