Correlation Between Quhuo and Logility

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

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

Diversification Opportunities for Quhuo and Logility

-0.34

Correlation Coefficient

Quhuo  Logility

Very good diversification

The 3 months correlation between Quhuo and Logility is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Logility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logility 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 Logility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logility has no effect on the direction of Quhuo i.e., Quhuo and Logility go up and down completely randomly.

Pair Corralation between Quhuo and Logility

Allowing for the 90-day total investment horizon Quhuo is expected to generate 8.86 times more return on investment than Logility. However, Quhuo is 8.86 times more volatile than Logility. It trades about 0.05 of its potential returns per unit of risk. Logility is currently generating about 0.01 per unit of risk. If you would invest  145.00  in Quhuo on September 25, 2024 and sell it today you would earn a total of  6.00  from holding Quhuo or generate 4.14% return on investment over 90 days.

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

Quhuo  vs.  Logility

Quhuo

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical indicators, Quhuo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Logility

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logility are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Logility is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quhuo and Logility

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

The idea behind Quhuo and Logility 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.