Correlation Between Auction Technology and Qurate Retail

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

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

Diversification Opportunities for Auction Technology and Qurate Retail

-0.79

Correlation Coefficient

Auction Technology  Qurate Retail

Pay attention - limited upside

The 3 months correlation between Auction and Qurate is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and Auction 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 Auction Technology Group are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Auction Technology i.e., Auction Technology and Qurate Retail go up and down completely randomly.

Pair Corralation between Auction Technology and Qurate Retail

Assuming the 90 days trading horizon Auction Technology Group is expected to generate 0.47 times more return on investment than Qurate Retail. However, Auction Technology Group is 2.11 times less risky than Qurate Retail. It trades about -0.01 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.03 per unit of risk. If you would invest  73,100  in Auction Technology Group on October 11, 2024 and sell it today you would lose (19,600) from holding Auction Technology Group or give up 26.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

Auction Technology Group  vs.  Qurate Retail Series

Auction Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auction Technology Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Auction Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Auction Technology and Qurate Retail

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

The idea behind Auction Technology Group and Qurate Retail Series 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.