Correlation Between Qualys and China Aircraft

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

By analyzing existing cross correlation between Qualys Inc and China Aircraft Leasing, you can compare the effects of market volatilities on Qualys and China Aircraft 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 Qualys with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualys and China Aircraft.

Diversification Opportunities for Qualys and China Aircraft

-0.34

Correlation Coefficient

Qualys  China Aircraft

Very good diversification

The 3 months correlation between Qualys and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and Qualys 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 Qualys Inc are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Qualys i.e., Qualys and China Aircraft go up and down completely randomly.

Pair Corralation between Qualys and China Aircraft

Given the investment horizon of 90 days Qualys Inc is expected to under-perform the China Aircraft. But the stock apears to be less risky and, when comparing its historical volatility, Qualys Inc is 1.25 times less risky than China Aircraft. The stock trades about -0.06 of its potential returns per unit of risk. The China Aircraft Leasing is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  40.00  in China Aircraft Leasing on December 28, 2024 and sell it today you would earn a total of  7.00  from holding China Aircraft Leasing or generate 17.5% return on investment over 90 days.

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

Qualys Inc  vs.  China Aircraft Leasing

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

China Aircraft Leasing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in China Aircraft Leasing are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, China Aircraft reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qualys and China Aircraft

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

The idea behind Qualys Inc and China Aircraft Leasing 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.