Correlation Between Qualys and Tenable Holdings

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

By analyzing existing cross correlation between Qualys Inc and Tenable Holdings, you can compare the effects of market volatilities on Qualys and Tenable Holdings 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 Tenable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualys and Tenable Holdings.

Diversification Opportunities for Qualys and Tenable Holdings

0.84

Correlation Coefficient

Qualys  Tenable Holdings

Very poor diversification

The 3 months correlation between Qualys and Tenable is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings 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 Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of Qualys i.e., Qualys and Tenable Holdings go up and down completely randomly.

Pair Corralation between Qualys and Tenable Holdings

Given the investment horizon of 90 days Qualys Inc is expected to generate 0.88 times more return on investment than Tenable Holdings. However, Qualys Inc is 1.14 times less risky than Tenable Holdings. It trades about -0.06 of its potential returns per unit of risk. Tenable Holdings is currently generating about -0.06 per unit of risk. If you would invest  13,963  in Qualys Inc on December 29, 2024 and sell it today you would lose (950.00) from holding Qualys Inc or give up 6.8% of portfolio value over 90 days.

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

Qualys Inc  vs.  Tenable Holdings

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 comparatively stable basic indicators, Qualys is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Tenable Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tenable Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Qualys and Tenable Holdings

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

The idea behind Qualys Inc and Tenable Holdings 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.