Correlation Between I Mab and Q2 Holdings

Can any of the company-specific risk be diversified away by investing in both I Mab and Q2 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 I Mab and Q2 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between I Mab and Q2 Holdings, you can compare the effects of market volatilities on I Mab and Q2 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 I Mab with a short position of Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Mab and Q2 Holdings.

Diversification Opportunities for I Mab and Q2 Holdings

0.2

Correlation Coefficient

I Mab  Q2 Holdings

Modest diversification

The 3 months correlation between IMAB and QTWO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding I Mab and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings and I Mab 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 I Mab are associated (or correlated) with Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of I Mab i.e., I Mab and Q2 Holdings go up and down completely randomly.

Pair Corralation between I Mab and Q2 Holdings

Given the investment horizon of 90 days I Mab is expected to generate 1.67 times more return on investment than Q2 Holdings. However, I Mab is 1.67 times more volatile than Q2 Holdings. It trades about -0.01 of its potential returns per unit of risk. Q2 Holdings is currently generating about -0.17 per unit of risk. If you would invest  92.00  in I Mab on December 18, 2024 and sell it today you would lose (7.00) from holding I Mab or give up 7.61% of portfolio value over 90 days.

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

I Mab  vs.  Q2 Holdings

I Mab

Risk-Adjusted Performance

Very Weak

Over the last 90 days I Mab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, I Mab is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Q2 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Q2 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with I Mab and Q2 Holdings

The main advantage of trading using opposite I Mab and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Mab position performs unexpectedly, Q2 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.

The idea behind I Mab and Q2 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.