Correlation Between Quest Resource and PFSweb

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

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

Diversification Opportunities for Quest Resource and PFSweb

-0.66

Correlation Coefficient

Quest Resource  PFSweb

Excellent diversification

The 3 months correlation between Quest and PFSweb is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Quest Resource Holding and PFSweb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFSweb Inc and Quest Resource 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 Resource Holding are associated (or correlated) with PFSweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFSweb Inc has no effect on the direction of Quest Resource i.e., Quest Resource and PFSweb go up and down completely randomly.

Pair Corralation between Quest Resource and PFSweb

If you would invest  452.00  in PFSweb Inc on October 3, 2024 and sell it today you would earn a total of  0.00  from holding PFSweb Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.19%
Values	Daily Returns

Quest Resource Holding  vs.  PFSweb Inc

Quest Resource Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quest Resource Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

PFSweb Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Quest Resource and PFSweb

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

The idea behind Quest Resource Holding and PFSweb Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.