Correlation Between Qilian International and Silver Spike

Can any of the company-specific risk be diversified away by investing in both Qilian International and Silver Spike 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 Silver Spike 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 Silver Spike Investment, you can compare the effects of market volatilities on Qilian International and Silver Spike 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 Silver Spike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qilian International and Silver Spike.

Diversification Opportunities for Qilian International and Silver Spike

0.54

Correlation Coefficient

Qilian International  Silver Spike

Very weak diversification

The 3 months correlation between Qilian and Silver is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Qilian International Holding and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment 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 Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of Qilian International i.e., Qilian International and Silver Spike go up and down completely randomly.

Pair Corralation between Qilian International and Silver Spike

Considering the 90-day investment horizon Qilian International Holding is expected to generate 9.75 times more return on investment than Silver Spike. However, Qilian International is 9.75 times more volatile than Silver Spike Investment. It trades about 0.05 of its potential returns per unit of risk. Silver Spike Investment is currently generating about 0.36 per unit of risk. If you would invest  71.00  in Qilian International Holding on March 11, 2024 and sell it today you would earn a total of  2.00  from holding Qilian International Holding or generate 2.82% return on investment over 90 days.

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

Qilian International Holding  vs.  Silver Spike Investment

Qilian International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qilian International Holding are ranked lower than 6 (%) 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.

Silver Spike Investment

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Spike Investment are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Silver Spike exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qilian International and Silver Spike

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

The idea behind Qilian International Holding and Silver Spike Investment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.