Correlation Between Qudian and Mill City

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

By analyzing existing cross correlation between Qudian Inc and Mill City Ventures, you can compare the effects of market volatilities on Qudian and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Mill City.

Diversification Opportunities for Qudian and Mill City

-0.73

Correlation Coefficient

Qudian  Mill City

Pay attention - limited upside

The 3 months correlation between Qudian and Mill is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Qudian i.e., Qudian and Mill City go up and down completely randomly.

Pair Corralation between Qudian and Mill City

Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 1.08 times more return on investment than Mill City. However, Qudian is 1.08 times more volatile than Mill City Ventures. It trades about 0.17 of its potential returns per unit of risk. Mill City Ventures is currently generating about -0.09 per unit of risk. If you would invest  184.00  in Qudian Inc on August 30, 2024 and sell it today you would earn a total of  120.00  from holding Qudian Inc or generate 65.22% return on investment over 90 days.

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

Qudian Inc  vs.  Mill City Ventures

Qudian Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qudian Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Qudian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mill City Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mill City Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Qudian and Mill City

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

The idea behind Qudian Inc and Mill City Ventures 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.