Correlation Between Gap, and QT Imaging

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

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

Diversification Opportunities for Gap, and QT Imaging

-0.66

Correlation Coefficient

Gap,  QT Imaging

Excellent diversification

The 3 months correlation between Gap, and QTI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings and Gap, 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 The Gap, are associated (or correlated) with QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Gap, i.e., Gap, and QT Imaging go up and down completely randomly.

Pair Corralation between Gap, and QT Imaging

Considering the 90-day investment horizon The Gap, is expected to generate 0.34 times more return on investment than QT Imaging. However, The Gap, is 2.93 times less risky than QT Imaging. It trades about 0.11 of its potential returns per unit of risk. QT Imaging Holdings is currently generating about -0.02 per unit of risk. If you would invest  2,053  in The Gap, on October 8, 2024 and sell it today you would earn a total of  369.00  from holding The Gap, or generate 17.97% return on investment over 90 days.

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

The Gap,  vs.  QT Imaging Holdings

Gap,

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Gap, and QT Imaging

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

The idea behind The Gap, and QT Imaging Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.