Correlation Between Scepter Holdings and Qed Connect

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

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

Diversification Opportunities for Scepter Holdings and Qed Connect

0.03

Correlation Coefficient

Scepter Holdings  Qed Connect

Significant diversification

The 3 months correlation between Scepter and Qed is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Scepter Holdings and Qed Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qed Connect and Scepter Holdings 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 Scepter Holdings are associated (or correlated) with Qed Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qed Connect has no effect on the direction of Scepter Holdings i.e., Scepter Holdings and Qed Connect go up and down completely randomly.

Pair Corralation between Scepter Holdings and Qed Connect

Given the investment horizon of 90 days Scepter Holdings is expected to generate 0.74 times more return on investment than Qed Connect. However, Scepter Holdings is 1.34 times less risky than Qed Connect. It trades about 0.2 of its potential returns per unit of risk. Qed Connect is currently generating about 0.08 per unit of risk. If you would invest  0.08  in Scepter Holdings on December 27, 2024 and sell it today you would earn a total of  0.20  from holding Scepter Holdings or generate 250.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Scepter Holdings  vs.  Qed Connect

Scepter Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scepter Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Scepter Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Qed Connect

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qed Connect are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Qed Connect displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scepter Holdings and Qed Connect

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

The idea behind Scepter Holdings and Qed Connect 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.