Correlation Between QPR Software and CapMan Oyj

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

By analyzing existing cross correlation between QPR Software Oyj and CapMan Oyj B, you can compare the effects of market volatilities on QPR Software and CapMan Oyj 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 QPR Software with a short position of CapMan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of QPR Software and CapMan Oyj.

Diversification Opportunities for QPR Software and CapMan Oyj

0.47

Correlation Coefficient

QPR Software  CapMan Oyj

Very weak diversification

The 3 months correlation between QPR and CapMan is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding QPR Software Oyj and CapMan Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapMan Oyj B and QPR Software 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 QPR Software Oyj are associated (or correlated) with CapMan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapMan Oyj B has no effect on the direction of QPR Software i.e., QPR Software and CapMan Oyj go up and down completely randomly.

Pair Corralation between QPR Software and CapMan Oyj

Assuming the 90 days trading horizon QPR Software Oyj is expected to generate 1.74 times more return on investment than CapMan Oyj. However, QPR Software is 1.74 times more volatile than CapMan Oyj B. It trades about 0.04 of its potential returns per unit of risk. CapMan Oyj B is currently generating about 0.01 per unit of risk. If you would invest  56.00  in QPR Software Oyj on September 5, 2024 and sell it today you would earn a total of  3.00  from holding QPR Software Oyj or generate 5.36% return on investment over 90 days.

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

QPR Software Oyj  vs.  CapMan Oyj B

QPR Software Oyj

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QPR Software Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, QPR Software may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CapMan Oyj B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CapMan Oyj B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CapMan Oyj is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with QPR Software and CapMan Oyj

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

The idea behind QPR Software Oyj and CapMan Oyj B 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.