Correlation Between Questerre Energy and XXL ASA

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

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

Diversification Opportunities for Questerre Energy and XXL ASA

0.05

Correlation Coefficient

Questerre Energy  XXL ASA

Significant diversification

The 3 months correlation between Questerre and XXL is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Questerre Energy and XXL ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXL ASA and Questerre Energy 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 Questerre Energy are associated (or correlated) with XXL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXL ASA has no effect on the direction of Questerre Energy i.e., Questerre Energy and XXL ASA go up and down completely randomly.

Pair Corralation between Questerre Energy and XXL ASA

Assuming the 90 days trading horizon Questerre Energy is expected to generate 0.43 times more return on investment than XXL ASA. However, Questerre Energy is 2.34 times less risky than XXL ASA. It trades about 0.03 of its potential returns per unit of risk. XXL ASA is currently generating about -0.26 per unit of risk. If you would invest  186.00  in Questerre Energy on August 31, 2024 and sell it today you would earn a total of  5.00  from holding Questerre Energy or generate 2.69% return on investment over 90 days.

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

Questerre Energy  vs.  XXL ASA

Questerre Energy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Questerre Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Questerre Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

XXL ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XXL ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Questerre Energy and XXL ASA

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

The idea behind Questerre Energy and XXL ASA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..