Correlation Between Performance Technologies and Quest Holdings

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

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

Diversification Opportunities for Performance Technologies and Quest Holdings

-0.2

Correlation Coefficient

Performance Technologies  Quest Holdings

Good diversification

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

Pair Corralation between Performance Technologies and Quest Holdings

Assuming the 90 days trading horizon Performance Technologies SA is expected to under-perform the Quest Holdings. In addition to that, Performance Technologies is 1.44 times more volatile than Quest Holdings SA. It trades about -0.12 of its total potential returns per unit of risk. Quest Holdings SA is currently generating about 0.15 per unit of volatility. If you would invest  555.00  in Quest Holdings SA on October 21, 2024 and sell it today you would earn a total of  64.00  from holding Quest Holdings SA or generate 11.53% return on investment over 90 days.

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

Performance Technologies SA  vs.  Quest Holdings SA

Performance Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performance Technologies SA 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Quest Holdings SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quest Holdings SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Quest Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Performance Technologies and Quest Holdings

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

The idea behind Performance Technologies SA and Quest Holdings SA 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.