Correlation Between Quhuo and Braze

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

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

Diversification Opportunities for Quhuo and Braze

-0.19

Correlation Coefficient

Quhuo  Braze

Good diversification

The 3 months correlation between Quhuo and Braze is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Braze Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braze Inc 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 Braze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braze Inc has no effect on the direction of Quhuo i.e., Quhuo and Braze go up and down completely randomly.

Pair Corralation between Quhuo and Braze

Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the Braze. In addition to that, Quhuo is 1.05 times more volatile than Braze Inc. It trades about -0.11 of its total potential returns per unit of risk. Braze Inc is currently generating about 0.16 per unit of volatility. If you would invest  4,095  in Braze Inc on October 11, 2024 and sell it today you would earn a total of  320.00  from holding Braze Inc or generate 7.81% return on investment over 90 days.

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

Quhuo  vs.  Braze Inc

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.

Braze Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quhuo and Braze

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

The idea behind Quhuo and Braze Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.