Correlation Between Ajinomoto and Qed Connect

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

By analyzing existing cross correlation between Ajinomoto Co ADR and Qed Connect, you can compare the effects of market volatilities on Ajinomoto and Qed Connect 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 Ajinomoto with a short position of Qed Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajinomoto and Qed Connect.

Diversification Opportunities for Ajinomoto and Qed Connect

-0.78

Correlation Coefficient

Ajinomoto  Qed Connect

Pay attention - limited upside

The 3 months correlation between Ajinomoto and Qed is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ajinomoto Co ADR and Qed Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qed Connect and Ajinomoto 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 Ajinomoto Co ADR are associated (or correlated) with Qed Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qed Connect has no effect on the direction of Ajinomoto i.e., Ajinomoto and Qed Connect go up and down completely randomly.

Pair Corralation between Ajinomoto and Qed Connect

Assuming the 90 days horizon Ajinomoto Co ADR is expected to generate 0.12 times more return on investment than Qed Connect. However, Ajinomoto Co ADR is 8.61 times less risky than Qed Connect. It trades about -0.05 of its potential returns per unit of risk. Qed Connect is currently generating about -0.15 per unit of risk. If you would invest  4,163  in Ajinomoto Co ADR on September 24, 2024 and sell it today you would lose (63.00) from holding Ajinomoto Co ADR or give up 1.51% of portfolio value over 90 days.

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

Ajinomoto Co ADR  vs.  Qed Connect

Ajinomoto Co ADR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ajinomoto Co ADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Ajinomoto may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Qed Connect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qed Connect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ajinomoto and Qed Connect

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

The idea behind Ajinomoto Co ADR and Qed Connect 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..