Correlation Between Reo Plastics and QVC

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

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

Diversification Opportunities for Reo Plastics and QVC

0.77

Correlation Coefficient

Reo Plastics  QVC

Poor diversification

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

Pair Corralation between Reo Plastics and QVC

Given the investment horizon of 90 days Reo Plastics is expected to generate 6.23 times less return on investment than QVC. But when comparing it to its historical volatility, Reo Plastics is 6.21 times less risky than QVC. It trades about 0.24 of its potential returns per unit of risk. QVC Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  347.00  in QVC Group on August 3, 2025 and sell it today you would earn a total of  792.00  from holding QVC Group or generate 228.24% return on investment over 90 days.

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

Reo Plastics  vs.  QVC Group

Reo Plastics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Reo Plastics are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reo Plastics reported solid returns over the last few months and may actually be approaching a breakup point.

QVC Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in QVC Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical and fundamental indicators, QVC sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Reo Plastics and QVC

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

The idea behind Reo Plastics and QVC Group 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.