Correlation Between Qurate Retail and Oriental Culture

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

By analyzing existing cross correlation between Qurate Retail Series and Oriental Culture Holding, you can compare the effects of market volatilities on Qurate Retail and Oriental Culture 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 Qurate Retail with a short position of Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Oriental Culture.

Diversification Opportunities for Qurate Retail and Oriental Culture

0.55

Correlation Coefficient

Qurate Retail  Oriental Culture

Very weak diversification

The 3 months correlation between Qurate and Oriental is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Oriental Culture Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Culture Holding and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Oriental Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Culture Holding has no effect on the direction of Qurate Retail i.e., Qurate Retail and Oriental Culture go up and down completely randomly.

Pair Corralation between Qurate Retail and Oriental Culture

Assuming the 90 days horizon Qurate Retail Series is expected to under-perform the Oriental Culture. But the stock apears to be less risky and, when comparing its historical volatility, Qurate Retail Series is 1.2 times less risky than Oriental Culture. The stock trades about -0.06 of its potential returns per unit of risk. The Oriental Culture Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  138.00  in Oriental Culture Holding on December 1, 2024 and sell it today you would lose (8.00) from holding Oriental Culture Holding or give up 5.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.33%
Values	Daily Returns

Qurate Retail Series  vs.  Oriental Culture Holding

Qurate Retail Series

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Oriental Culture Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oriental Culture Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Oriental Culture is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Qurate Retail and Oriental Culture

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

The idea behind Qurate Retail Series and Oriental Culture Holding 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.