Correlation Between Chimera Investment and QRTEB Old

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

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

Diversification Opportunities for Chimera Investment and QRTEB Old

-0.39

Correlation Coefficient

Chimera Investment  QRTEB Old

Very good diversification

The 3 months correlation between Chimera and QRTEB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chimera Investment and QRTEB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QRTEB Old and Chimera Investment 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 Chimera Investment are associated (or correlated) with QRTEB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QRTEB Old has no effect on the direction of Chimera Investment i.e., Chimera Investment and QRTEB Old go up and down completely randomly.

Pair Corralation between Chimera Investment and QRTEB Old

Assuming the 90 days trading horizon Chimera Investment is expected to generate 0.05 times more return on investment than QRTEB Old. However, Chimera Investment is 18.25 times less risky than QRTEB Old. It trades about -0.04 of its potential returns per unit of risk. QRTEB Old is currently generating about -0.2 per unit of risk. If you would invest  2,426  in Chimera Investment on December 30, 2024 and sell it today you would lose (16.00) from holding Chimera Investment or give up 0.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.68%
Values	Daily Returns

Chimera Investment  vs.  QRTEB Old

Chimera Investment

Risk-Adjusted Performance

Very Weak

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

QRTEB Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days QRTEB Old 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Chimera Investment and QRTEB Old

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

The idea behind Chimera Investment and QRTEB Old 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.