Correlation Between Credo Brands and Quess Corp

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

By analyzing existing cross correlation between Credo Brands Marketing and Quess Corp Limited, you can compare the effects of market volatilities on Credo Brands and Quess Corp 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 Credo Brands with a short position of Quess Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credo Brands and Quess Corp.

Diversification Opportunities for Credo Brands and Quess Corp

0.64

Correlation Coefficient

Credo Brands  Quess Corp

Poor diversification

The 3 months correlation between Credo and Quess is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Credo Brands Marketing and Quess Corp Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quess Corp Limited and Credo Brands 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 Credo Brands Marketing are associated (or correlated) with Quess Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quess Corp Limited has no effect on the direction of Credo Brands i.e., Credo Brands and Quess Corp go up and down completely randomly.

Pair Corralation between Credo Brands and Quess Corp

Assuming the 90 days trading horizon Credo Brands Marketing is expected to under-perform the Quess Corp. In addition to that, Credo Brands is 1.11 times more volatile than Quess Corp Limited. It trades about -0.15 of its total potential returns per unit of risk. Quess Corp Limited is currently generating about 0.03 per unit of volatility. If you would invest  66,228  in Quess Corp Limited on December 23, 2024 and sell it today you would earn a total of  2,077  from holding Quess Corp Limited or generate 3.14% return on investment over 90 days.

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

Credo Brands Marketing  vs.  Quess Corp Limited

Credo Brands Marketing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Credo Brands Marketing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental 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.

Quess Corp Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quess Corp Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Quess Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Credo Brands and Quess Corp

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

The idea behind Credo Brands Marketing and Quess Corp Limited 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 Anywhere module to track or share privately all of your investments from the convenience of any device.