Correlation Between Questor Technology and Pfizer

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

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

Diversification Opportunities for Questor Technology and Pfizer

0.68

Correlation Coefficient

Questor Technology  Pfizer

Poor diversification

The 3 months correlation between Questor and Pfizer is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and Pfizer Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc CDR 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc CDR has no effect on the direction of Questor Technology i.e., Questor Technology and Pfizer go up and down completely randomly.

Pair Corralation between Questor Technology and Pfizer

Assuming the 90 days horizon Questor Technology is expected to generate 2.67 times more return on investment than Pfizer. However, Questor Technology is 2.67 times more volatile than Pfizer Inc CDR. It trades about 0.0 of its potential returns per unit of risk. Pfizer Inc CDR is currently generating about -0.07 per unit of risk. If you would invest  36.00  in Questor Technology on September 30, 2024 and sell it today you would lose (2.00) from holding Questor Technology or give up 5.56% of portfolio value over 90 days.

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

Questor Technology  vs.  Pfizer Inc CDR

Questor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pfizer Inc CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pfizer Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Questor Technology and Pfizer

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

The idea behind Questor Technology and Pfizer Inc CDR 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.