Correlation Between Qudian and Highest Performances

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

By analyzing existing cross correlation between Qudian Inc and Highest Performances Holdings, you can compare the effects of market volatilities on Qudian and Highest Performances 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 Qudian with a short position of Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Highest Performances.

Diversification Opportunities for Qudian and Highest Performances

0.04

Correlation Coefficient

Qudian  Highest Performances

Significant diversification

The 3 months correlation between Qudian and Highest is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances and Qudian 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 Qudian Inc are associated (or correlated) with Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of Qudian i.e., Qudian and Highest Performances go up and down completely randomly.

Pair Corralation between Qudian and Highest Performances

Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 0.41 times more return on investment than Highest Performances. However, Qudian Inc is 2.44 times less risky than Highest Performances. It trades about 0.07 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.05 per unit of risk. If you would invest  253.00  in Qudian Inc on December 19, 2024 and sell it today you would earn a total of  31.00  from holding Qudian Inc or generate 12.25% return on investment over 90 days.

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

Qudian Inc  vs.  Highest Performances Holdings

Qudian Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qudian Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Qudian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Highest Performances

Risk-Adjusted Performance

Very Weak

Over the last 90 days Highest Performances Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Qudian and Highest Performances

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

The idea behind Qudian Inc and Highest Performances Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.