Correlation Between QURATE RETAIL and BANK OF CHINA

Can any of the company-specific risk be diversified away by investing in both QURATE RETAIL and BANK OF CHINA 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 QURATE RETAIL and BANK OF CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QURATE RETAIL INC and BANK OF CHINA, you can compare the effects of market volatilities on QURATE RETAIL and BANK OF 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 QURATE RETAIL with a short position of BANK OF CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of QURATE RETAIL and BANK OF CHINA.

Diversification Opportunities for QURATE RETAIL and BANK OF CHINA

-0.66

Correlation Coefficient

QURATE RETAIL  BANK OF CHINA

Excellent diversification

The 3 months correlation between QURATE and BANK is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding QURATE RETAIL INC and BANK OF CHINA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF CHINA and QURATE RETAIL 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 QURATE RETAIL INC are associated (or correlated) with BANK OF CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF CHINA has no effect on the direction of QURATE RETAIL i.e., QURATE RETAIL and BANK OF CHINA go up and down completely randomly.

Pair Corralation between QURATE RETAIL and BANK OF CHINA

Assuming the 90 days trading horizon QURATE RETAIL INC is expected to under-perform the BANK OF CHINA. In addition to that, QURATE RETAIL is 1.12 times more volatile than BANK OF CHINA. It trades about -0.09 of its total potential returns per unit of risk. BANK OF CHINA is currently generating about 0.15 per unit of volatility. If you would invest  33.00  in BANK OF CHINA on October 25, 2024 and sell it today you would earn a total of  15.00  from holding BANK OF CHINA or generate 45.45% return on investment over 90 days.

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

QURATE RETAIL INC  vs.  BANK OF CHINA

QURATE RETAIL INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

BANK OF CHINA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BANK OF CHINA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, BANK OF CHINA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QURATE RETAIL and BANK OF CHINA

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

The idea behind QURATE RETAIL INC and BANK OF CHINA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.