Correlation Between Quhuo and Yunji

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

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

Diversification Opportunities for Quhuo and Yunji

0.35

Correlation Coefficient

Quhuo  Yunji

Weak diversification

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

Pair Corralation between Quhuo and Yunji

Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the Yunji. But the stock apears to be less risky and, when comparing its historical volatility, Quhuo is 1.86 times less risky than Yunji. The stock trades about -0.02 of its potential returns per unit of risk. The Yunji Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  171.00  in Yunji Inc on December 26, 2024 and sell it today you would earn a total of  11.00  from holding Yunji Inc or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Quhuo  vs.  Yunji Inc

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.

Yunji Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Quhuo and Yunji

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

The idea behind Quhuo and Yunji 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.