Correlation Between Borqs Technologies and HeartCore Enterprises

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

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

Diversification Opportunities for Borqs Technologies and HeartCore Enterprises

-0.71

Correlation Coefficient

Borqs Technologies  HeartCore Enterprises

Pay attention - limited upside

The 3 months correlation between Borqs and HeartCore is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Borqs Technologies and HeartCore Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeartCore Enterprises 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 HeartCore Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeartCore Enterprises has no effect on the direction of Borqs Technologies i.e., Borqs Technologies and HeartCore Enterprises go up and down completely randomly.

Pair Corralation between Borqs Technologies and HeartCore Enterprises

Given the investment horizon of 90 days Borqs Technologies is expected to under-perform the HeartCore Enterprises. But the stock apears to be less risky and, when comparing its historical volatility, Borqs Technologies is 1.37 times less risky than HeartCore Enterprises. The stock trades about -0.01 of its potential returns per unit of risk. The HeartCore Enterprises is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  79.00  in HeartCore Enterprises on September 29, 2024 and sell it today you would earn a total of  81.00  from holding HeartCore Enterprises or generate 102.53% return on investment over 90 days.

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

Borqs Technologies  vs.  HeartCore Enterprises

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.

HeartCore Enterprises

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HeartCore Enterprises are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, HeartCore Enterprises reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Borqs Technologies and HeartCore Enterprises

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

The idea behind Borqs Technologies and HeartCore Enterprises 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.