Correlation Between Impulse Qingdao and Montage Technology

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

By analyzing existing cross correlation between Impulse Qingdao Health and Montage Technology Co, you can compare the effects of market volatilities on Impulse Qingdao and Montage Technology 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 Impulse Qingdao with a short position of Montage Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impulse Qingdao and Montage Technology.

Diversification Opportunities for Impulse Qingdao and Montage Technology

0.46

Correlation Coefficient

Impulse Qingdao  Montage Technology

Very weak diversification

The 3 months correlation between Impulse and Montage is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Impulse Qingdao Health and Montage Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Technology and Impulse Qingdao 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 Impulse Qingdao Health are associated (or correlated) with Montage Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Technology has no effect on the direction of Impulse Qingdao i.e., Impulse Qingdao and Montage Technology go up and down completely randomly.

Pair Corralation between Impulse Qingdao and Montage Technology

Assuming the 90 days trading horizon Impulse Qingdao Health is expected to generate 0.99 times more return on investment than Montage Technology. However, Impulse Qingdao Health is 1.01 times less risky than Montage Technology. It trades about 0.18 of its potential returns per unit of risk. Montage Technology Co is currently generating about 0.09 per unit of risk. If you would invest  1,262  in Impulse Qingdao Health on October 3, 2024 and sell it today you would earn a total of  980.00  from holding Impulse Qingdao Health or generate 77.65% return on investment over 90 days.

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

Impulse Qingdao Health  vs.  Montage Technology Co

Impulse Qingdao Health

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Impulse Qingdao Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Impulse Qingdao sustained solid returns over the last few months and may actually be approaching a breakup point.

Montage Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Montage Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Impulse Qingdao and Montage Technology

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

The idea behind Impulse Qingdao Health and Montage Technology Co 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..