Correlation Between Quest For and Compagnie

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

By analyzing existing cross correlation between Quest For Growth and Compagnie d Entreprises, you can compare the effects of market volatilities on Quest For and Compagnie 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 Quest For with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quest For and Compagnie.

Diversification Opportunities for Quest For and Compagnie

0.59

Correlation Coefficient

Quest For  Compagnie

Very weak diversification

The 3 months correlation between Quest and Compagnie is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Quest For Growth and Compagnie d Entreprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie d Entreprises and Quest For 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 Quest For Growth are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie d Entreprises has no effect on the direction of Quest For i.e., Quest For and Compagnie go up and down completely randomly.

Pair Corralation between Quest For and Compagnie

Assuming the 90 days trading horizon Quest For is expected to generate 8.98 times less return on investment than Compagnie. But when comparing it to its historical volatility, Quest For Growth is 1.8 times less risky than Compagnie. It trades about 0.07 of its potential returns per unit of risk. Compagnie d Entreprises is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  582.00  in Compagnie d Entreprises on October 20, 2024 and sell it today you would earn a total of  58.00  from holding Compagnie d Entreprises or generate 9.97% return on investment over 90 days.

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

Quest For Growth  vs.  Compagnie d Entreprises

Quest For Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quest For Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Compagnie d Entreprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie d Entreprises has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Compagnie is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Quest For and Compagnie

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

The idea behind Quest For Growth and Compagnie d Entreprises 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.