Correlation Between Qed Connect and Grand Havana

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

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

Diversification Opportunities for Qed Connect and Grand Havana

-0.02

Correlation Coefficient

Qed Connect  Grand Havana

Good diversification

The 3 months correlation between Qed and Grand is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Qed Connect and Grand Havana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Havana 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 Grand Havana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Havana has no effect on the direction of Qed Connect i.e., Qed Connect and Grand Havana go up and down completely randomly.

Pair Corralation between Qed Connect and Grand Havana

Given the investment horizon of 90 days Qed Connect is expected to generate 1.21 times more return on investment than Grand Havana. However, Qed Connect is 1.21 times more volatile than Grand Havana. It trades about 0.05 of its potential returns per unit of risk. Grand Havana is currently generating about 0.02 per unit of risk. If you would invest  0.05  in Qed Connect on September 4, 2024 and sell it today you would lose (0.01) from holding Qed Connect or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Qed Connect  vs.  Grand Havana

Qed Connect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qed Connect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Qed Connect is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Grand Havana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Havana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly conflicting basic indicators, Grand Havana may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Qed Connect and Grand Havana

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

The idea behind Qed Connect and Grand Havana 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.