Correlation Between QuhuoLtd and MCloud Technologies

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

By analyzing existing cross correlation between QuhuoLtd and MCloud Technologies Corp, you can compare the effects of market volatilities on QuhuoLtd and MCloud Technologies 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 MCloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of QuhuoLtd and MCloud Technologies.

Diversification Opportunities for QuhuoLtd and MCloud Technologies

0.36

Correlation Coefficient

QuhuoLtd  MCloud Technologies

Weak diversification

The 3 months correlation between QuhuoLtd and MCloud is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding QuhuoLtd and MCloud Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCloud Technologies Corp 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 MCloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCloud Technologies Corp has no effect on the direction of QuhuoLtd i.e., QuhuoLtd and MCloud Technologies go up and down completely randomly.

Pair Corralation between QuhuoLtd and MCloud Technologies

If you would invest  0.10  in MCloud Technologies Corp on January 19, 2024 and sell it today you would earn a total of  0.00  from holding MCloud Technologies Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

QuhuoLtd  vs.  MCloud Technologies Corp

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 fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

MCloud Technologies Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCloud Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MCloud Technologies is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with QuhuoLtd and MCloud Technologies

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

The idea behind QuhuoLtd and MCloud Technologies Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.