Correlation Between EQ and Quotient Technology

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

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

Diversification Opportunities for EQ and Quotient Technology

0.0

Correlation Coefficient

EQ  Quotient Technology

Pay attention - limited upside

The 3 months correlation between EQ and Quotient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EQ Inc and Quotient Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quotient Technology and EQ 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 EQ Inc are associated (or correlated) with Quotient Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quotient Technology has no effect on the direction of EQ i.e., EQ and Quotient Technology go up and down completely randomly.

Pair Corralation between EQ and Quotient Technology

If you would invest (100.00) in Quotient Technology on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Quotient Technology or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EQ Inc  vs.  Quotient Technology

EQ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days EQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EQ is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Quotient Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quotient Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Quotient Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EQ and Quotient Technology

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

The idea behind EQ Inc and Quotient 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.