Correlation Between Qurate Retail and ATRenew

Can any of the company-specific risk be diversified away by investing in both Qurate Retail and ATRenew 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 ATRenew 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 ATRenew Inc DRC, you can compare the effects of market volatilities on Qurate Retail and ATRenew 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 ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and ATRenew.

Diversification Opportunities for Qurate Retail and ATRenew

0.26

Correlation Coefficient

Qurate Retail  ATRenew

Modest diversification

The 3 months correlation between Qurate and ATRenew is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Qurate Retail i.e., Qurate Retail and ATRenew go up and down completely randomly.

Pair Corralation between Qurate Retail and ATRenew

Assuming the 90 days horizon Qurate Retail Series is expected to under-perform the ATRenew. In addition to that, Qurate Retail is 1.29 times more volatile than ATRenew Inc DRC. It trades about -0.1 of its total potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.17 per unit of volatility. If you would invest  272.00  in ATRenew Inc DRC on November 28, 2024 and sell it today you would earn a total of  40.50  from holding ATRenew Inc DRC or generate 14.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

Qurate Retail Series  vs.  ATRenew Inc DRC

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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ATRenew Inc DRC

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATRenew Inc DRC 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 sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Qurate Retail and ATRenew

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

The idea behind Qurate Retail Series and ATRenew Inc DRC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..