Correlation Between Qilian International and Amphastar

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

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

Diversification Opportunities for Qilian International and Amphastar

-0.69

Correlation Coefficient

Qilian International  Amphastar

Excellent diversification

The 3 months correlation between Qilian and Amphastar is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Qilian International Holding and Amphastar P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphastar P and Qilian International 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 Qilian International Holding are associated (or correlated) with Amphastar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphastar P has no effect on the direction of Qilian International i.e., Qilian International and Amphastar go up and down completely randomly.

Pair Corralation between Qilian International and Amphastar

Considering the 90-day investment horizon Qilian International Holding is expected to generate 3.65 times more return on investment than Amphastar. However, Qilian International is 3.65 times more volatile than Amphastar P. It trades about 0.06 of its potential returns per unit of risk. Amphastar P is currently generating about -0.14 per unit of risk. If you would invest  59.00  in Qilian International Holding on February 24, 2024 and sell it today you would earn a total of  7.00  from holding Qilian International Holding or generate 11.86% return on investment over 90 days.

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

Qilian International Holding  vs.  Amphastar P

Qilian International

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qilian International Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent essential indicators, Qilian International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Amphastar P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amphastar P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Qilian International and Amphastar

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

The idea behind Qilian International Holding and Amphastar P 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.