Correlation Between Exel Composites and Qt Group

Can any of the company-specific risk be diversified away by investing in both Exel Composites and Qt Group 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 Qt Group 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 Qt Group Oyj, you can compare the effects of market volatilities on Exel Composites and Qt Group 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 Qt Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Composites and Qt Group.

Diversification Opportunities for Exel Composites and Qt Group

0.95

Correlation Coefficient

Exel Composites  Qt Group

Almost no diversification

The 3 months correlation between Exel and QTCOM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites Oyj and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group 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 Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Exel Composites i.e., Exel Composites and Qt Group go up and down completely randomly.

Pair Corralation between Exel Composites and Qt Group

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Qt Group. In addition to that, Exel Composites is 1.03 times more volatile than Qt Group Oyj. It trades about -0.19 of its total potential returns per unit of risk. Qt Group Oyj is currently generating about -0.18 per unit of volatility. If you would invest  9,320  in Qt Group Oyj on September 28, 2024 and sell it today you would lose (2,645) from holding Qt Group Oyj or give up 28.38% of portfolio value over 90 days.

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

Exel Composites Oyj  vs.  Qt Group 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 inconsistent 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.

Qt Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qt Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Exel Composites and Qt Group

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

The idea behind Exel Composites Oyj and Qt Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.