Correlation Between St Galler and Quadrise Plc

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

By analyzing existing cross correlation between St Galler Kantonalbank and Quadrise Plc, you can compare the effects of market volatilities on St Galler and Quadrise Plc 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 St Galler with a short position of Quadrise Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Quadrise Plc.

Diversification Opportunities for St Galler and Quadrise Plc

0.72

Correlation Coefficient

St Galler  Quadrise Plc

Poor diversification

The 3 months correlation between 0QQZ and Quadrise is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Quadrise Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadrise Plc and St Galler 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 St Galler Kantonalbank are associated (or correlated) with Quadrise Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadrise Plc has no effect on the direction of St Galler i.e., St Galler and Quadrise Plc go up and down completely randomly.

Pair Corralation between St Galler and Quadrise Plc

Assuming the 90 days trading horizon St Galler is expected to generate 18.25 times less return on investment than Quadrise Plc. But when comparing it to its historical volatility, St Galler Kantonalbank is 13.28 times less risky than Quadrise Plc. It trades about 0.14 of its potential returns per unit of risk. Quadrise Plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Quadrise Plc on September 13, 2024 and sell it today you would earn a total of  240.00  from holding Quadrise Plc or generate 150.0% return on investment over 90 days.

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

St Galler Kantonalbank  vs.  Quadrise Plc

St Galler Kantonalbank

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Quadrise Plc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quadrise Plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Quadrise Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with St Galler and Quadrise Plc

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

The idea behind St Galler Kantonalbank and Quadrise Plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.