Correlation Between Nisun International and Qudian

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

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

Diversification Opportunities for Nisun International and Qudian

0.24

Correlation Coefficient

Nisun International  Qudian

Modest diversification

The 3 months correlation between Nisun and Qudian is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise and Qudian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qudian Inc and Nisun 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 Nisun International Enterprise 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 Nisun International i.e., Nisun International and Qudian go up and down completely randomly.

Pair Corralation between Nisun International and Qudian

Given the investment horizon of 90 days Nisun International Enterprise is expected to generate 3.28 times more return on investment than Qudian. However, Nisun International is 3.28 times more volatile than Qudian Inc. It trades about 0.19 of its potential returns per unit of risk. Qudian Inc is currently generating about 0.02 per unit of risk. If you would invest  585.00  in Nisun International Enterprise on February 4, 2024 and sell it today you would earn a total of  187.00  from holding Nisun International Enterprise or generate 31.97% return on investment over 90 days.

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

Nisun International Enterprise  vs.  Qudian Inc

Nisun International

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Nisun International displayed solid returns over the last few months and may actually be approaching a breakup point.

Qudian Inc

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qudian Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental indicators, Qudian may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Nisun International and Qudian

The main advantage of trading using opposite Nisun International and Qudian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nisun International 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 Nisun International Enterprise 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.