Correlation Between Ispire Technology and Quanergy Systems

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

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

Diversification Opportunities for Ispire Technology and Quanergy Systems

-0.13

Correlation Coefficient

Ispire Technology  Quanergy Systems

Good diversification

The 3 months correlation between Ispire and Quanergy is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common and Quanergy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanergy Systems and Ispire Technology 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 Ispire Technology Common are associated (or correlated) with Quanergy Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanergy Systems has no effect on the direction of Ispire Technology i.e., Ispire Technology and Quanergy Systems go up and down completely randomly.

Pair Corralation between Ispire Technology and Quanergy Systems

Given the investment horizon of 90 days Ispire Technology Common is expected to generate 2.74 times more return on investment than Quanergy Systems. However, Ispire Technology is 2.74 times more volatile than Quanergy Systems. It trades about 0.01 of its potential returns per unit of risk. Quanergy Systems is currently generating about 0.01 per unit of risk. If you would invest  755.00  in Ispire Technology Common on October 26, 2024 and sell it today you would lose (305.00) from holding Ispire Technology Common or give up 40.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.88%
Values	Daily Returns

Ispire Technology Common  vs.  Quanergy Systems

Ispire Technology Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ispire Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Quanergy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quanergy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Quanergy Systems is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ispire Technology and Quanergy Systems

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

The idea behind Ispire Technology Common and Quanergy Systems 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.