Correlation Between Qumei Furniture and Shandong Sinoglory
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By analyzing existing cross correlation between Qumei Furniture Group and Shandong Sinoglory Health, you can compare the effects of market volatilities on Qumei Furniture and Shandong Sinoglory 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 Shandong Sinoglory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qumei Furniture and Shandong Sinoglory.
Diversification Opportunities for Qumei Furniture and Shandong Sinoglory
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Qumei and Shandong is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Qumei Furniture Group and Shandong Sinoglory Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sinoglory Health 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 Shandong Sinoglory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sinoglory Health has no effect on the direction of Qumei Furniture i.e., Qumei Furniture and Shandong Sinoglory go up and down completely randomly.
Pair Corralation between Qumei Furniture and Shandong Sinoglory
Assuming the 90 days trading horizon Qumei Furniture Group is expected to under-perform the Shandong Sinoglory. In addition to that, Qumei Furniture is 1.3 times more volatile than Shandong Sinoglory Health. It trades about -0.03 of its total potential returns per unit of risk. Shandong Sinoglory Health is currently generating about -0.02 per unit of volatility. If you would invest 1,694 in Shandong Sinoglory Health on September 20, 2024 and sell it today you would lose (460.00) from holding Shandong Sinoglory Health or give up 27.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qumei Furniture Group vs. Shandong Sinoglory Health
Performance |
Timeline |
Qumei Furniture Group |
Shandong Sinoglory Health |
Qumei Furniture and Shandong Sinoglory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qumei Furniture and Shandong Sinoglory
The main advantage of trading using opposite Qumei Furniture and Shandong Sinoglory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qumei Furniture position performs unexpectedly, Shandong Sinoglory 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 Sinoglory will offset losses from the drop in Shandong Sinoglory's long position.Qumei Furniture vs. Lutian Machinery Co | Qumei Furniture vs. China Longyuan Power | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. Bank of China |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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