Correlation Between MQ Technology and Genetec Technology

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

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

Diversification Opportunities for MQ Technology and Genetec Technology

-0.75

Correlation Coefficient

MQ Technology  Genetec Technology

Pay attention - limited upside

The 3 months correlation between 0070 and Genetec is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding MQ Technology Bhd and Genetec Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetec Technology Bhd and MQ Technology 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 MQ Technology Bhd are associated (or correlated) with Genetec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetec Technology Bhd has no effect on the direction of MQ Technology i.e., MQ Technology and Genetec Technology go up and down completely randomly.

Pair Corralation between MQ Technology and Genetec Technology

Assuming the 90 days trading horizon MQ Technology Bhd is expected to under-perform the Genetec Technology. In addition to that, MQ Technology is 1.67 times more volatile than Genetec Technology Bhd. It trades about -0.1 of its total potential returns per unit of risk. Genetec Technology Bhd is currently generating about 0.23 per unit of volatility. If you would invest  122.00  in Genetec Technology Bhd on October 5, 2024 and sell it today you would earn a total of  19.00  from holding Genetec Technology Bhd or generate 15.57% return on investment over 90 days.

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

MQ Technology Bhd  vs.  Genetec Technology Bhd

MQ Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQ Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Genetec Technology Bhd

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genetec Technology Bhd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Genetec Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MQ Technology and Genetec Technology

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

The idea behind MQ Technology Bhd and Genetec Technology Bhd 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.