Correlation Between WeTrade Group and Quhuo

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

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

Diversification Opportunities for WeTrade Group and Quhuo

0.4

Correlation Coefficient

WeTrade Group  Quhuo

Very weak diversification

The 3 months correlation between WeTrade and Quhuo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding WeTrade Group Ordinary and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo and WeTrade Group 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 WeTrade Group Ordinary 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 WeTrade Group i.e., WeTrade Group and Quhuo go up and down completely randomly.

Pair Corralation between WeTrade Group and Quhuo

Given the investment horizon of 90 days WeTrade Group Ordinary is expected to under-perform the Quhuo. But the stock apears to be less risky and, when comparing its historical volatility, WeTrade Group Ordinary is 1.23 times less risky than Quhuo. The stock trades about -0.04 of its potential returns per unit of risk. The Quhuo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Quhuo on September 20, 2024 and sell it today you would earn a total of  20.00  from holding Quhuo or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.32%
Values	Daily Returns

WeTrade Group Ordinary  vs.  Quhuo

WeTrade Group Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

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

Quhuo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quhuo are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical indicators, Quhuo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WeTrade Group and Quhuo

The main advantage of trading using opposite WeTrade Group and Quhuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WeTrade Group 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 WeTrade Group Ordinary 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 Transaction History module to view history of all your transactions and understand their impact on performance.