Correlation Between QINGCI GAMES and Chuangs China

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

By analyzing existing cross correlation between QINGCI GAMES INC and Chuangs China Investments, you can compare the effects of market volatilities on QINGCI GAMES and Chuangs China 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 QINGCI GAMES with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of QINGCI GAMES and Chuangs China.

Diversification Opportunities for QINGCI GAMES and Chuangs China

0.21

Correlation Coefficient

QINGCI GAMES  Chuangs China

Modest diversification

The 3 months correlation between QINGCI and Chuangs is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding QINGCI GAMES INC and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and QINGCI GAMES 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 QINGCI GAMES INC are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of QINGCI GAMES i.e., QINGCI GAMES and Chuangs China go up and down completely randomly.

Pair Corralation between QINGCI GAMES and Chuangs China

Assuming the 90 days horizon QINGCI GAMES INC is expected to generate 3.34 times more return on investment than Chuangs China. However, QINGCI GAMES is 3.34 times more volatile than Chuangs China Investments. It trades about 0.03 of its potential returns per unit of risk. Chuangs China Investments is currently generating about 0.0 per unit of risk. If you would invest  26.00  in QINGCI GAMES INC on September 12, 2024 and sell it today you would earn a total of  1.00  from holding QINGCI GAMES INC or generate 3.85% return on investment over 90 days.

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

QINGCI GAMES INC  vs.  Chuangs China Investments

QINGCI GAMES INC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, QINGCI GAMES may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chuangs China Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with QINGCI GAMES and Chuangs China

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

The idea behind QINGCI GAMES INC and Chuangs China Investments 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.