Correlation Between John B and Qed Connect

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

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

Diversification Opportunities for John B and Qed Connect

0.53

Correlation Coefficient

John B  Qed Connect

Very weak diversification

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

Pair Corralation between John B and Qed Connect

Given the investment horizon of 90 days John B is expected to generate 30.93 times less return on investment than Qed Connect. But when comparing it to its historical volatility, John B Sanfilippo is 9.19 times less risky than Qed Connect. It trades about 0.02 of its potential returns per unit of risk. Qed Connect is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Qed Connect on September 22, 2024 and sell it today you would lose (0.01) from holding Qed Connect or give up 25.0% of portfolio value over 90 days.

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

John B Sanfilippo  vs.  Qed Connect

John B Sanfilippo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Qed Connect

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with John B and Qed Connect

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

The idea behind John B Sanfilippo and Qed Connect 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.