Correlation Between CyberAgent and QuinStreet

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

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

Diversification Opportunities for CyberAgent and QuinStreet

-0.65

Correlation Coefficient

CyberAgent  QuinStreet

Excellent diversification

The 3 months correlation between CyberAgent and QuinStreet is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CyberAgent ADR and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet and CyberAgent 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 CyberAgent ADR are associated (or correlated) with QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of CyberAgent i.e., CyberAgent and QuinStreet go up and down completely randomly.

Pair Corralation between CyberAgent and QuinStreet

Assuming the 90 days horizon CyberAgent ADR is expected to under-perform the QuinStreet. But the pink sheet apears to be less risky and, when comparing its historical volatility, CyberAgent ADR is 1.49 times less risky than QuinStreet. The pink sheet trades about -0.06 of its potential returns per unit of risk. The QuinStreet is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,857  in QuinStreet on October 25, 2024 and sell it today you would earn a total of  335.00  from holding QuinStreet or generate 18.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

CyberAgent ADR  vs.  QuinStreet

CyberAgent ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberAgent ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

QuinStreet

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuinStreet are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, QuinStreet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CyberAgent and QuinStreet

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

The idea behind CyberAgent ADR and QuinStreet 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.