Correlation Between ESGL Holdings and Quad Graphics

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

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

Diversification Opportunities for ESGL Holdings and Quad Graphics

-0.81

Correlation Coefficient

ESGL Holdings  Quad Graphics

Pay attention - limited upside

The 3 months correlation between ESGL and Quad is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding ESGL Holdings Limited and Quad Graphics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quad Graphics and ESGL Holdings 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 ESGL Holdings Limited are associated (or correlated) with Quad Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quad Graphics has no effect on the direction of ESGL Holdings i.e., ESGL Holdings and Quad Graphics go up and down completely randomly.

Pair Corralation between ESGL Holdings and Quad Graphics

Given the investment horizon of 90 days ESGL Holdings Limited is expected to generate 1.89 times more return on investment than Quad Graphics. However, ESGL Holdings is 1.89 times more volatile than Quad Graphics. It trades about 0.08 of its potential returns per unit of risk. Quad Graphics is currently generating about 0.05 per unit of risk. If you would invest  57.00  in ESGL Holdings Limited on October 5, 2024 and sell it today you would earn a total of  74.50  from holding ESGL Holdings Limited or generate 130.7% return on investment over 90 days.

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

ESGL Holdings Limited  vs.  Quad Graphics

ESGL Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESGL Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Quad Graphics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quad Graphics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Quad Graphics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ESGL Holdings and Quad Graphics

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

The idea behind ESGL Holdings Limited and Quad Graphics 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 Transaction History module to view history of all your transactions and understand their impact on performance.