Correlation Between Zhongtong Guomai and Queclink Wireless

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

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

Diversification Opportunities for Zhongtong Guomai and Queclink Wireless

0.01

Correlation Coefficient

Zhongtong Guomai  Queclink Wireless

Significant diversification

The 3 months correlation between Zhongtong and Queclink is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Queclink Wireless Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queclink Wireless and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Queclink Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queclink Wireless has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Queclink Wireless go up and down completely randomly.

Pair Corralation between Zhongtong Guomai and Queclink Wireless

Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.45 times more return on investment than Queclink Wireless. However, Zhongtong Guomai is 1.45 times more volatile than Queclink Wireless Solutions. It trades about 0.1 of its potential returns per unit of risk. Queclink Wireless Solutions is currently generating about -0.03 per unit of risk. If you would invest  749.00  in Zhongtong Guomai Communication on October 9, 2024 and sell it today you would earn a total of  202.00  from holding Zhongtong Guomai Communication or generate 26.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Zhongtong Guomai Communication  vs.  Queclink Wireless Solutions

Zhongtong Guomai Com

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zhongtong Guomai Communication are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhongtong Guomai sustained solid returns over the last few months and may actually be approaching a breakup point.

Queclink Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zhongtong Guomai and Queclink Wireless

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

The idea behind Zhongtong Guomai Communication and Queclink Wireless Solutions 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.