Correlation Between Athens Medical and Quest Holdings

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

By analyzing existing cross correlation between Athens Medical CSA and Quest Holdings SA, you can compare the effects of market volatilities on Athens Medical and Quest Holdings 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 Athens Medical with a short position of Quest Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens Medical and Quest Holdings.

Diversification Opportunities for Athens Medical and Quest Holdings

0.53

Correlation Coefficient

Athens Medical  Quest Holdings

Very weak diversification

The 3 months correlation between Athens and Quest is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Athens Medical CSA and Quest Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quest Holdings SA and Athens Medical 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 Athens Medical CSA are associated (or correlated) with Quest Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quest Holdings SA has no effect on the direction of Athens Medical i.e., Athens Medical and Quest Holdings go up and down completely randomly.

Pair Corralation between Athens Medical and Quest Holdings

Assuming the 90 days trading horizon Athens Medical is expected to generate 3.53 times less return on investment than Quest Holdings. In addition to that, Athens Medical is 1.15 times more volatile than Quest Holdings SA. It trades about 0.01 of its total potential returns per unit of risk. Quest Holdings SA is currently generating about 0.04 per unit of volatility. If you would invest  469.00  in Quest Holdings SA on October 26, 2024 and sell it today you would earn a total of  155.00  from holding Quest Holdings SA or generate 33.05% return on investment over 90 days.

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

Athens Medical CSA  vs.  Quest Holdings SA

Athens Medical CSA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Athens Medical CSA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Athens Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Quest Holdings SA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quest Holdings SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Quest Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Athens Medical and Quest Holdings

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

The idea behind Athens Medical CSA and Quest Holdings SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.