Correlation Between Borqs Technologies and Movella Holdings

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

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

Diversification Opportunities for Borqs Technologies and Movella Holdings

-0.46

Correlation Coefficient

Borqs Technologies  Movella Holdings

Very good diversification

The 3 months correlation between Borqs and Movella is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Borqs Technologies and Movella Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movella Holdings 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 Movella Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movella Holdings has no effect on the direction of Borqs Technologies i.e., Borqs Technologies and Movella Holdings go up and down completely randomly.

Pair Corralation between Borqs Technologies and Movella Holdings

Given the investment horizon of 90 days Borqs Technologies is expected to generate 0.66 times more return on investment than Movella Holdings. However, Borqs Technologies is 1.51 times less risky than Movella Holdings. It trades about -0.01 of its potential returns per unit of risk. Movella Holdings 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Borqs Technologies  vs.  Movella Holdings

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.

Movella Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movella Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Movella Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Borqs Technologies and Movella Holdings

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

The idea behind Borqs Technologies and Movella 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.