Correlation Between Borqs Technologies and Exela Technologies

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Can any of the company-specific risk be diversified away by investing in both Borqs Technologies and Exela 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 Exela 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 Exela Technologies, you can compare the effects of market volatilities on Borqs Technologies and Exela 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 Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borqs Technologies and Exela Technologies.

Diversification Opportunities for Borqs Technologies and Exela Technologies

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Borqs and Exela is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Borqs Technologies and Exela Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of Borqs Technologies i.e., Borqs Technologies and Exela Technologies go up and down completely randomly.

Pair Corralation between Borqs Technologies and Exela Technologies

Given the investment horizon of 90 days Borqs Technologies is expected to generate 0.73 times more return on investment than Exela Technologies. However, Borqs Technologies is 1.37 times less risky than Exela Technologies. It trades about -0.03 of its potential returns per unit of risk. Exela Technologies is currently generating about -0.03 per unit of risk. If you would invest  30.00  in Borqs Technologies on October 22, 2024 and sell it today you would lose (10.00) from holding Borqs Technologies or give up 33.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy26.83%
ValuesDaily Returns

Borqs Technologies  vs.  Exela Technologies

 Performance 
       Timeline  
Borqs Technologies 

Risk-Adjusted Performance

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Weak
 
Strong
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.
Exela Technologies 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Borqs Technologies and Exela Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Borqs Technologies and Exela Technologies

The main advantage of trading using opposite Borqs Technologies and Exela Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borqs Technologies position performs unexpectedly, Exela 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 Exela Technologies will offset losses from the drop in Exela Technologies' long position.
The idea behind Borqs Technologies and Exela 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.
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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