Correlation Between Rumble and Quhuo

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

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

Diversification Opportunities for Rumble and Quhuo

0.23

Correlation Coefficient

Rumble  Quhuo

Modest diversification

The 3 months correlation between Rumble and Quhuo is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rumble Inc and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo and Rumble 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 Rumble Inc are associated (or correlated) with Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Rumble i.e., Rumble and Quhuo go up and down completely randomly.

Pair Corralation between Rumble and Quhuo

Considering the 90-day investment horizon Rumble Inc is expected to generate 9.27 times more return on investment than Quhuo. However, Rumble is 9.27 times more volatile than Quhuo. It trades about 0.22 of its potential returns per unit of risk. Quhuo is currently generating about 0.31 per unit of risk. If you would invest  734.00  in Rumble Inc on October 5, 2024 and sell it today you would earn a total of  609.00  from holding Rumble Inc or generate 82.97% return on investment over 90 days.

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

Rumble Inc  vs.  Quhuo

Rumble Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rumble Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rumble displayed solid returns over the last few months and may actually be approaching a breakup point.

Quhuo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Rumble and Quhuo

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

The idea behind Rumble Inc and Quhuo 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.