Correlation Between QPR Software and Spinnova

Can any of the company-specific risk be diversified away by investing in both QPR Software and Spinnova 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 Spinnova 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 Spinnova Oy, you can compare the effects of market volatilities on QPR Software and Spinnova 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 Spinnova. Check out your portfolio center. Please also check ongoing floating volatility patterns of QPR Software and Spinnova.

Diversification Opportunities for QPR Software and Spinnova

0.14

Correlation Coefficient

QPR Software  Spinnova

Average diversification

The 3 months correlation between QPR and Spinnova is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding QPR Software Oyj and Spinnova Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnova Oy 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 Spinnova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnova Oy has no effect on the direction of QPR Software i.e., QPR Software and Spinnova go up and down completely randomly.

Pair Corralation between QPR Software and Spinnova

Assuming the 90 days trading horizon QPR Software Oyj is expected to generate 1.04 times more return on investment than Spinnova. However, QPR Software is 1.04 times more volatile than Spinnova Oy. It trades about 0.19 of its potential returns per unit of risk. Spinnova Oy is currently generating about -0.16 per unit of risk. If you would invest  61.00  in QPR Software Oyj on October 5, 2024 and sell it today you would earn a total of  29.00  from holding QPR Software Oyj or generate 47.54% return on investment over 90 days.

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

QPR Software Oyj  vs.  Spinnova Oy

QPR Software Oyj

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QPR Software Oyj are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, QPR Software demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Spinnova Oy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spinnova Oy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with QPR Software and Spinnova

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

The idea behind QPR Software Oyj and Spinnova Oy 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.