Correlation Between Oneconnect Financial and Quhuo

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

By analyzing existing cross correlation between Oneconnect Financial Technology and Quhuo, you can compare the effects of market volatilities on Oneconnect Financial and Quhuo 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 Oneconnect Financial with a short position of Quhuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oneconnect Financial and Quhuo.

Diversification Opportunities for Oneconnect Financial and Quhuo

0.13

Correlation Coefficient

Oneconnect Financial  Quhuo

Average diversification

The 3 months correlation between Oneconnect and Quhuo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Oneconnect Financial Technolog and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo and Oneconnect Financial 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 Oneconnect Financial Technology are associated (or correlated) with Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Oneconnect Financial i.e., Oneconnect Financial and Quhuo go up and down completely randomly.

Pair Corralation between Oneconnect Financial and Quhuo

Given the investment horizon of 90 days Oneconnect Financial is expected to generate 3.33 times less return on investment than Quhuo. But when comparing it to its historical volatility, Oneconnect Financial Technology is 2.98 times less risky than Quhuo. It trades about 0.08 of its potential returns per unit of risk. Quhuo is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Quhuo on September 27, 2024 and sell it today you would earn a total of  109.00  from holding Quhuo or generate 272.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Oneconnect Financial Technolog  vs.  Quhuo

Oneconnect Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneconnect Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Quhuo

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical indicators, Quhuo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oneconnect Financial and Quhuo

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

The idea behind Oneconnect Financial Technology and Quhuo 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.