Correlation Between QuhuoLtd and Auddia

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

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

Diversification Opportunities for QuhuoLtd and Auddia

0.77

Correlation Coefficient

QuhuoLtd  Auddia

Poor diversification

The 3 months correlation between QuhuoLtd and Auddia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding QuhuoLtd and Auddia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auddia Inc and QuhuoLtd 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 QuhuoLtd are associated (or correlated) with Auddia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auddia Inc has no effect on the direction of QuhuoLtd i.e., QuhuoLtd and Auddia go up and down completely randomly.

Pair Corralation between QuhuoLtd and Auddia

Allowing for the 90-day total investment horizon QuhuoLtd is expected to under-perform the Auddia. But the stock apears to be less risky and, when comparing its historical volatility, QuhuoLtd is 2.71 times less risky than Auddia. The stock trades about -0.12 of its potential returns per unit of risk. The Auddia Inc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  508.00  in Auddia Inc on February 20, 2024 and sell it today you would lose (368.00) from holding Auddia Inc or give up 72.44% of portfolio value over 90 days.

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

QuhuoLtd  vs.  Auddia Inc

QuhuoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QuhuoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical 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.

Auddia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Auddia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with QuhuoLtd and Auddia

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

The idea behind QuhuoLtd and Auddia Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.