Correlation Between AirIQ and Quarterhill

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

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

Diversification Opportunities for AirIQ and Quarterhill

0.31

Correlation Coefficient

AirIQ  Quarterhill

Weak diversification

The 3 months correlation between AirIQ and Quarterhill is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding AirIQ Inc and Quarterhill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quarterhill and AirIQ 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 AirIQ Inc are associated (or correlated) with Quarterhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quarterhill has no effect on the direction of AirIQ i.e., AirIQ and Quarterhill go up and down completely randomly.

Pair Corralation between AirIQ and Quarterhill

Given the investment horizon of 90 days AirIQ Inc is expected to under-perform the Quarterhill. In addition to that, AirIQ is 1.17 times more volatile than Quarterhill. It trades about -0.16 of its total potential returns per unit of risk. Quarterhill is currently generating about -0.02 per unit of volatility. If you would invest  160.00  in Quarterhill on October 20, 2024 and sell it today you would lose (2.00) from holding Quarterhill or give up 1.25% of portfolio value over 90 days.

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

AirIQ Inc  vs.  Quarterhill

AirIQ Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AirIQ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Quarterhill

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quarterhill has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic 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 AirIQ and Quarterhill

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

The idea behind AirIQ Inc and Quarterhill 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.