Correlation Between Global E and Qurate Retail

Can any of the company-specific risk be diversified away by investing in both Global E and Qurate Retail 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 Global E and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global E Online and Qurate Retail, you can compare the effects of market volatilities on Global E and Qurate Retail 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 Global E with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Qurate Retail.

Diversification Opportunities for Global E and Qurate Retail

0.24

Correlation Coefficient

Global E  Qurate Retail

Modest diversification

The 3 months correlation between Global and Qurate is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Qurate Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail and Global E 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 Global E Online are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail has no effect on the direction of Global E i.e., Global E and Qurate Retail go up and down completely randomly.

Pair Corralation between Global E and Qurate Retail

Given the investment horizon of 90 days Global E Online is expected to under-perform the Qurate Retail. In addition to that, Global E is 1.27 times more volatile than Qurate Retail. It trades about -0.17 of its total potential returns per unit of risk. Qurate Retail is currently generating about -0.05 per unit of volatility. If you would invest  3,173  in Qurate Retail on December 29, 2024 and sell it today you would lose (280.00) from holding Qurate Retail or give up 8.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

Global E Online  vs.  Qurate Retail

Global E Online

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global E Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Qurate Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qurate Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Global E and Qurate Retail

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

The idea behind Global E Online and Qurate Retail 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.