Correlation Between Quhuo and Blend Labs

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

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

Diversification Opportunities for Quhuo and Blend Labs

-0.3

Correlation Coefficient

Quhuo  Blend Labs

Very good diversification

The 3 months correlation between Quhuo and Blend is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Blend Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blend Labs and Quhuo 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 Quhuo are associated (or correlated) with Blend Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blend Labs has no effect on the direction of Quhuo i.e., Quhuo and Blend Labs go up and down completely randomly.

Pair Corralation between Quhuo and Blend Labs

Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the Blend Labs. But the stock apears to be less risky and, when comparing its historical volatility, Quhuo is 1.54 times less risky than Blend Labs. The stock trades about -0.02 of its potential returns per unit of risk. The Blend Labs is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  344.00  in Blend Labs on October 26, 2024 and sell it today you would earn a total of  28.00  from holding Blend Labs or generate 8.14% return on investment over 90 days.

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

Quhuo  vs.  Blend Labs

Quhuo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quhuo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Quhuo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Blend Labs

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blend Labs are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Blend Labs exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quhuo and Blend Labs

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

The idea behind Quhuo and Blend Labs 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.