Correlation Between Quhuo and EZFL Old

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

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

Diversification Opportunities for Quhuo and EZFL Old

0.15

Correlation Coefficient

Quhuo  EZFL Old

Average diversification

The 3 months correlation between Quhuo and EZFL is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and EZFL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZFL Old 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 EZFL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZFL Old has no effect on the direction of Quhuo i.e., Quhuo and EZFL Old go up and down completely randomly.

Pair Corralation between Quhuo and EZFL Old

Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the EZFL Old. But the stock apears to be less risky and, when comparing its historical volatility, Quhuo is 3.11 times less risky than EZFL Old. The stock trades about -0.01 of its potential returns per unit of risk. The EZFL Old is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  332.00  in EZFL Old on December 28, 2024 and sell it today you would earn a total of  18.00  from holding EZFL Old or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.33%
Values	Daily Returns

Quhuo  vs.  EZFL Old

Quhuo

Risk-Adjusted Performance

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.

EZFL Old

Risk-Adjusted Performance

Insignificant

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quhuo and EZFL Old

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

The idea behind Quhuo and EZFL Old 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.