Correlation Between FG Annuities and Qudian

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

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

Diversification Opportunities for FG Annuities and Qudian

-0.5

Correlation Coefficient

FG Annuities  Qudian

Very good diversification

The 3 months correlation between FG Annuities and Qudian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding FG Annuities Life and Qudian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qudian Inc and FG Annuities 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 FG Annuities Life are associated (or correlated) with Qudian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qudian Inc has no effect on the direction of FG Annuities i.e., FG Annuities and Qudian go up and down completely randomly.

Pair Corralation between FG Annuities and Qudian

Allowing for the 90-day total investment horizon FG Annuities Life is expected to under-perform the Qudian. But the stock apears to be less risky and, when comparing its historical volatility, FG Annuities Life is 1.02 times less risky than Qudian. The stock trades about -0.12 of its potential returns per unit of risk. The Qudian Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Qudian Inc on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Qudian Inc or generate 0.0% return on investment over 90 days.

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

FG Annuities Life  vs.  Qudian Inc

FG Annuities Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Annuities Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Qudian Inc

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qudian Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Qudian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FG Annuities and Qudian

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

The idea behind FG Annuities Life and Qudian 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..