Correlation Between Questor Technology and Brookfield

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

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

Diversification Opportunities for Questor Technology and Brookfield

-0.31

Correlation Coefficient

Questor Technology  Brookfield

Very good diversification

The 3 months correlation between Questor and Brookfield is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Questor Technology 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 Questor Technology are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Questor Technology i.e., Questor Technology and Brookfield go up and down completely randomly.

Pair Corralation between Questor Technology and Brookfield

Assuming the 90 days horizon Questor Technology is expected to under-perform the Brookfield. In addition to that, Questor Technology is 3.61 times more volatile than Brookfield. It trades about -0.03 of its total potential returns per unit of risk. Brookfield is currently generating about 0.04 per unit of volatility. If you would invest  2,090  in Brookfield on October 4, 2024 and sell it today you would earn a total of  375.00  from holding Brookfield or generate 17.94% return on investment over 90 days.

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

Questor Technology  vs.  Brookfield

Questor Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Questor Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Questor Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Brookfield

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Brookfield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Questor Technology and Brookfield

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

The idea behind Questor Technology and Brookfield 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .