Correlation Between Afya and QT Imaging

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

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

Diversification Opportunities for Afya and QT Imaging

0.48

Correlation Coefficient

Afya  QT Imaging

Very weak diversification

The 3 months correlation between Afya and QTI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Afya and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings and Afya 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 Afya are associated (or correlated) with QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Afya i.e., Afya and QT Imaging go up and down completely randomly.

Pair Corralation between Afya and QT Imaging

Given the investment horizon of 90 days Afya is expected to under-perform the QT Imaging. But the stock apears to be less risky and, when comparing its historical volatility, Afya is 3.7 times less risky than QT Imaging. The stock trades about -0.05 of its potential returns per unit of risk. The QT Imaging Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  74.00  in QT Imaging Holdings on October 7, 2024 and sell it today you would lose (28.00) from holding QT Imaging Holdings or give up 37.84% of portfolio value over 90 days.

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

Afya  vs.  QT Imaging Holdings

Afya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Afya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Afya and QT Imaging

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

The idea behind Afya and QT Imaging Holdings 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.