Correlation Between Borqs Technologies and Freight Technologies

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

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

Diversification Opportunities for Borqs Technologies and Freight Technologies

0.36

Correlation Coefficient

Borqs Technologies  Freight Technologies

Weak diversification

The 3 months correlation between Borqs and Freight is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Borqs Technologies and Freight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freight Technologies and Borqs Technologies 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 Borqs Technologies are associated (or correlated) with Freight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freight Technologies has no effect on the direction of Borqs Technologies i.e., Borqs Technologies and Freight Technologies go up and down completely randomly.

Pair Corralation between Borqs Technologies and Freight Technologies

Given the investment horizon of 90 days Borqs Technologies is expected to generate 0.66 times more return on investment than Freight Technologies. However, Borqs Technologies is 1.51 times less risky than Freight Technologies. It trades about -0.01 of its potential returns per unit of risk. Freight Technologies is currently generating about -0.09 per unit of risk. If you would invest  28.00  in Borqs Technologies on September 29, 2024 and sell it today you would lose (8.00) from holding Borqs Technologies or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.42%
Values	Daily Returns

Borqs Technologies  vs.  Freight Technologies

Borqs Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Borqs Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Borqs Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Freight Technologies

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freight Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Freight Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borqs Technologies and Freight Technologies

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

The idea behind Borqs Technologies and Freight Technologies 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.