Correlation Between Emera Pref and Quisitive Technology

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

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

Diversification Opportunities for Emera Pref and Quisitive Technology

0.27

Correlation Coefficient

Emera Pref  Quisitive Technology

Modest diversification

The 3 months correlation between Emera and Quisitive is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Emera Pref A and Quisitive Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quisitive Technology and Emera Pref 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 Emera Pref A are associated (or correlated) with Quisitive Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quisitive Technology has no effect on the direction of Emera Pref i.e., Emera Pref and Quisitive Technology go up and down completely randomly.

Pair Corralation between Emera Pref and Quisitive Technology

Assuming the 90 days trading horizon Emera Pref A is expected to generate 0.23 times more return on investment than Quisitive Technology. However, Emera Pref A is 4.26 times less risky than Quisitive Technology. It trades about 0.06 of its potential returns per unit of risk. Quisitive Technology Solutions is currently generating about 0.01 per unit of risk. If you would invest  1,286  in Emera Pref A on October 12, 2024 and sell it today you would earn a total of  414.00  from holding Emera Pref A or generate 32.19% return on investment over 90 days.

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

Emera Pref A  vs.  Quisitive Technology Solutions

Emera Pref A

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Emera Pref A are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Emera Pref may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Quisitive Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quisitive Technology Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Quisitive Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Emera Pref and Quisitive Technology

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

The idea behind Emera Pref A and Quisitive Technology Solutions 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.