Correlation Between Conquest Resources and Questor Technology

Can any of the company-specific risk be diversified away by investing in both Conquest Resources and Questor Technology 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 Conquest Resources and Questor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Conquest Resources and Questor Technology

0.53

Correlation Coefficient

Conquest Resources  Questor Technology

Very weak diversification

The 3 months correlation between Conquest and Questor is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Conquest Resources and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and Conquest Resources 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 Conquest Resources are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Conquest Resources i.e., Conquest Resources and Questor Technology go up and down completely randomly.

Pair Corralation between Conquest Resources and Questor Technology

Assuming the 90 days horizon Conquest Resources is expected to generate 1.65 times less return on investment than Questor Technology. In addition to that, Conquest Resources is 3.68 times more volatile than Questor Technology. It trades about 0.06 of its total potential returns per unit of risk. Questor Technology is currently generating about 0.35 per unit of volatility. If you would invest  27.00  in Questor Technology on September 23, 2024 and sell it today you would earn a total of  8.00  from holding Questor Technology or generate 29.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Conquest Resources  vs.  Questor Technology

Conquest Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conquest Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Conquest Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Questor Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Questor Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Questor Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Conquest Resources and Questor Technology

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

The idea behind Conquest Resources and Questor Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.