Correlation Between VIVA WINE and QINGCI GAMES

Can any of the company-specific risk be diversified away by investing in both VIVA WINE and QINGCI GAMES 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 VIVA WINE and QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIVA WINE GROUP and QINGCI GAMES INC, you can compare the effects of market volatilities on VIVA WINE and QINGCI GAMES 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 VIVA WINE with a short position of QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and QINGCI GAMES.

Diversification Opportunities for VIVA WINE and QINGCI GAMES

-0.52

Correlation Coefficient

VIVA WINE  QINGCI GAMES

Excellent diversification

The 3 months correlation between VIVA and QINGCI is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of VIVA WINE i.e., VIVA WINE and QINGCI GAMES go up and down completely randomly.

Pair Corralation between VIVA WINE and QINGCI GAMES

Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 1.51 times more return on investment than QINGCI GAMES. However, VIVA WINE is 1.51 times more volatile than QINGCI GAMES INC. It trades about 0.05 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about -0.02 per unit of risk. If you would invest  125.00  in VIVA WINE GROUP on September 30, 2024 and sell it today you would earn a total of  196.00  from holding VIVA WINE GROUP or generate 156.8% return on investment over 90 days.

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

VIVA WINE GROUP  vs.  QINGCI GAMES INC

VIVA WINE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIVA WINE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

QINGCI GAMES INC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QINGCI GAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIVA WINE and QINGCI GAMES

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

The idea behind VIVA WINE GROUP and QINGCI GAMES INC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.