Correlation Between Qleanair Holding and Profoto Holding

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

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

Diversification Opportunities for Qleanair Holding and Profoto Holding

0.91

Correlation Coefficient

Qleanair Holding  Profoto Holding

Almost no diversification

The 3 months correlation between Qleanair and Profoto is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Qleanair Holding AB and Profoto Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profoto Holding AB and Qleanair Holding 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 Qleanair Holding AB are associated (or correlated) with Profoto Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profoto Holding AB has no effect on the direction of Qleanair Holding i.e., Qleanair Holding and Profoto Holding go up and down completely randomly.

Pair Corralation between Qleanair Holding and Profoto Holding

Assuming the 90 days trading horizon Qleanair Holding AB is expected to generate 0.87 times more return on investment than Profoto Holding. However, Qleanair Holding AB is 1.15 times less risky than Profoto Holding. It trades about -0.14 of its potential returns per unit of risk. Profoto Holding AB is currently generating about -0.14 per unit of risk. If you would invest  1,950  in Qleanair Holding AB on October 9, 2024 and sell it today you would lose (240.00) from holding Qleanair Holding AB or give up 12.31% of portfolio value over 90 days.

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

Qleanair Holding AB  vs.  Profoto Holding AB

Qleanair Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qleanair Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Profoto Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Profoto Holding AB 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.

Pair Trading with Qleanair Holding and Profoto Holding

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

The idea behind Qleanair Holding AB and Profoto Holding AB 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 Stocks Directory module to find actively traded stocks across global markets.