Correlation Between Identillect Technologies and Queens Road

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

By analyzing existing cross correlation between Identillect Technologies Corp and Queens Road Capital, you can compare the effects of market volatilities on Identillect Technologies and Queens Road 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 Identillect Technologies with a short position of Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identillect Technologies and Queens Road.

Diversification Opportunities for Identillect Technologies and Queens Road

-0.36

Correlation Coefficient

Identillect Technologies  Queens Road

Very good diversification

The 3 months correlation between Identillect and Queens is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Identillect Technologies Corp and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital and Identillect Technologies 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 Identillect Technologies Corp are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Identillect Technologies i.e., Identillect Technologies and Queens Road go up and down completely randomly.

Pair Corralation between Identillect Technologies and Queens Road

Given the investment horizon of 90 days Identillect Technologies Corp is expected to generate 16.0 times more return on investment than Queens Road. However, Identillect Technologies is 16.0 times more volatile than Queens Road Capital. It trades about 0.14 of its potential returns per unit of risk. Queens Road Capital is currently generating about -0.08 per unit of risk. If you would invest  0.50  in Identillect Technologies Corp on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Identillect Technologies Corp or generate 0.0% return on investment over 90 days.

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

Identillect Technologies Corp  vs.  Queens Road Capital

Identillect Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Identillect Technologies Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Identillect Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Queens Road Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Identillect Technologies and Queens Road

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

The idea behind Identillect Technologies Corp and Queens Road Capital 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.