Correlation Between Qumei Furniture and Digital China
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By analyzing existing cross correlation between Qumei Furniture Group and Digital China Information, you can compare the effects of market volatilities on Qumei Furniture and Digital China 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 Qumei Furniture with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Digital China.
Diversification Opportunities for Qumei Furniture and Digital China
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qumei and Digital is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Qumei Furniture 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 Qumei Furniture Group are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Digital China go up and down completely randomly.
Pair Corralation between Qumei Furniture and Digital China
Assuming the 90 days trading horizon Qumei Furniture Group is expected to under-perform the Digital China. In addition to that, Qumei Furniture is 1.01 times more volatile than Digital China Information. It trades about -0.03 of its total potential returns per unit of risk. Digital China Information is currently generating about 0.03 per unit of volatility. If you would invest 1,118 in Digital China Information on September 24, 2024 and sell it today you would earn a total of 200.00 from holding Digital China Information or generate 17.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qumei Furniture Group vs. Digital China Information
Performance |
Timeline |
Qumei Furniture Group |
Digital China Information |
Qumei Furniture and Digital China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qumei Furniture and Digital China
The main advantage of trading using opposite Qumei Furniture and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.Qumei Furniture vs. Agricultural Bank of | Qumei Furniture vs. Industrial and Commercial | Qumei Furniture vs. Bank of China | Qumei Furniture vs. China Construction Bank |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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