Correlation Between Qed Connect and Branded Legacy

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

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

Diversification Opportunities for Qed Connect and Branded Legacy

-0.64

Correlation Coefficient

Qed Connect  Branded Legacy

Excellent diversification

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

Pair Corralation between Qed Connect and Branded Legacy

Given the investment horizon of 90 days Qed Connect is expected to generate 1.81 times more return on investment than Branded Legacy. However, Qed Connect is 1.81 times more volatile than Branded Legacy. It trades about 0.08 of its potential returns per unit of risk. Branded Legacy is currently generating about 0.1 per unit of risk. If you would invest  0.04  in Qed Connect on December 27, 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Qed Connect  vs.  Branded Legacy

Qed Connect

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qed Connect are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Qed Connect displayed solid returns over the last few months and may actually be approaching a breakup point.

Branded Legacy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Branded Legacy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Branded Legacy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qed Connect and Branded Legacy

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

The idea behind Qed Connect and Branded Legacy 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.