Correlation Between Qurate Retail and D MARKET

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

By analyzing existing cross correlation between Qurate Retail and D MARKET Electronic Services, you can compare the effects of market volatilities on Qurate Retail and D MARKET 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 D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and D MARKET.

Diversification Opportunities for Qurate Retail and D MARKET

0.53

Correlation Coefficient

Qurate Retail  D MARKET

Very weak diversification

The 3 months correlation between Qurate and HEPS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic 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 are associated (or correlated) with D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of Qurate Retail i.e., Qurate Retail and D MARKET go up and down completely randomly.

Pair Corralation between Qurate Retail and D MARKET

Assuming the 90 days horizon Qurate Retail is expected to under-perform the D MARKET. But the preferred stock apears to be less risky and, when comparing its historical volatility, Qurate Retail is 1.07 times less risky than D MARKET. The preferred stock trades about -0.05 of its potential returns per unit of risk. The D MARKET Electronic Services is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  316.00  in D MARKET Electronic Services on December 28, 2024 and sell it today you would lose (21.00) from holding D MARKET Electronic Services or give up 6.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.67%
Values	Daily Returns

Qurate Retail  vs.  D MARKET Electronic Services

Qurate Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qurate Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Preferred Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

D MARKET Electronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days D MARKET Electronic Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, D MARKET is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Qurate Retail and D MARKET

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

The idea behind Qurate Retail and D MARKET Electronic Services 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.