Correlation Between Quhuo and Fernhill Corp

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

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

Diversification Opportunities for Quhuo and Fernhill Corp

-0.35

Correlation Coefficient

Quhuo  Fernhill Corp

Very good diversification

The 3 months correlation between Quhuo and Fernhill is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Fernhill Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fernhill Corp 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 Fernhill Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fernhill Corp has no effect on the direction of Quhuo i.e., Quhuo and Fernhill Corp go up and down completely randomly.

Pair Corralation between Quhuo and Fernhill Corp

Allowing for the 90-day total investment horizon Quhuo is expected to generate 0.17 times more return on investment than Fernhill Corp. However, Quhuo is 5.96 times less risky than Fernhill Corp. It trades about 0.0 of its potential returns per unit of risk. Fernhill Corp is currently generating about -0.01 per unit of risk. If you would invest  152.00  in Quhuo on December 20, 2024 and sell it today you would lose (2.00) from holding Quhuo or give up 1.32% of portfolio value over 90 days.

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

Quhuo  vs.  Fernhill Corp

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.

Fernhill Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fernhill Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Quhuo and Fernhill Corp

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

The idea behind Quhuo and Fernhill Corp 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.