Correlation Between Chen Full and QST International

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

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

Diversification Opportunities for Chen Full and QST International

0.53

Correlation Coefficient

Chen Full  QST International

Very weak diversification

The 3 months correlation between Chen and QST is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chen Full International and QST International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QST International and Chen Full 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 Chen Full International are associated (or correlated) with QST International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QST International has no effect on the direction of Chen Full i.e., Chen Full and QST International go up and down completely randomly.

Pair Corralation between Chen Full and QST International

Assuming the 90 days trading horizon Chen Full International is expected to generate 2.23 times more return on investment than QST International. However, Chen Full is 2.23 times more volatile than QST International. It trades about 0.28 of its potential returns per unit of risk. QST International is currently generating about -0.16 per unit of risk. If you would invest  4,120  in Chen Full International on September 17, 2024 and sell it today you would earn a total of  375.00  from holding Chen Full International or generate 9.1% return on investment over 90 days.

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

Chen Full International  vs.  QST International

Chen Full International

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chen Full International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Chen Full is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

QST International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QST International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chen Full and QST International

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

The idea behind Chen Full International and QST International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.