Correlation Between ExpreS2ion Biotech and Qlife Holding

Can any of the company-specific risk be diversified away by investing in both ExpreS2ion Biotech and Qlife Holding 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 ExpreS2ion Biotech and Qlife Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ExpreS2ion Biotech Holding and Qlife Holding AB, you can compare the effects of market volatilities on ExpreS2ion Biotech and Qlife Holding 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 ExpreS2ion Biotech with a short position of Qlife Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExpreS2ion Biotech and Qlife Holding.

Diversification Opportunities for ExpreS2ion Biotech and Qlife Holding

0.44

Correlation Coefficient

ExpreS2ion Biotech  Qlife Holding

Very weak diversification

The 3 months correlation between ExpreS2ion and Qlife is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ExpreS2ion Biotech Holding and Qlife Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qlife Holding AB and ExpreS2ion Biotech 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 ExpreS2ion Biotech Holding are associated (or correlated) with Qlife Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qlife Holding AB has no effect on the direction of ExpreS2ion Biotech i.e., ExpreS2ion Biotech and Qlife Holding go up and down completely randomly.

Pair Corralation between ExpreS2ion Biotech and Qlife Holding

Assuming the 90 days trading horizon ExpreS2ion Biotech Holding is expected to under-perform the Qlife Holding. In addition to that, ExpreS2ion Biotech is 1.19 times more volatile than Qlife Holding AB. It trades about -0.06 of its total potential returns per unit of risk. Qlife Holding AB is currently generating about -0.03 per unit of volatility. If you would invest  255.00  in Qlife Holding AB on September 9, 2024 and sell it today you would lose (53.00) from holding Qlife Holding AB or give up 20.78% of portfolio value over 90 days.

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

ExpreS2ion Biotech Holding  vs.  Qlife Holding AB

ExpreS2ion Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExpreS2ion Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Qlife Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qlife Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ExpreS2ion Biotech and Qlife Holding

The main advantage of trading using opposite ExpreS2ion Biotech and Qlife Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExpreS2ion Biotech position performs unexpectedly, Qlife Holding 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 Qlife Holding will offset losses from the drop in Qlife Holding's long position.

The idea behind ExpreS2ion Biotech Holding and Qlife Holding AB 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.