Correlation Between Exel Composites and QPR Software

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

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

Diversification Opportunities for Exel Composites and QPR Software

0.37

Correlation Coefficient

Exel Composites  QPR Software

Weak diversification

The 3 months correlation between Exel and QPR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and QPR Software Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QPR Software Oyj and Exel Composites 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 Exel Composites Oyj are associated (or correlated) with QPR Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QPR Software Oyj has no effect on the direction of Exel Composites i.e., Exel Composites and QPR Software go up and down completely randomly.

Pair Corralation between Exel Composites and QPR Software

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the QPR Software. In addition to that, Exel Composites is 1.7 times more volatile than QPR Software Oyj. It trades about -0.09 of its total potential returns per unit of risk. QPR Software Oyj is currently generating about 0.07 per unit of volatility. If you would invest  38.00  in QPR Software Oyj on September 5, 2024 and sell it today you would earn a total of  21.00  from holding QPR Software Oyj or generate 55.26% return on investment over 90 days.

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

Exel Composites Oyj  vs.  QPR Software Oyj

Exel Composites Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exel Composites Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

QPR Software Oyj

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Exel Composites and QPR Software

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

The idea behind Exel Composites Oyj and QPR Software Oyj 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.