Correlation Between Qt Group and Gofore Oyj

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

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

Diversification Opportunities for Qt Group and Gofore Oyj

0.37

Correlation Coefficient

Qt Group  Gofore Oyj

Weak diversification

The 3 months correlation between QTCOM and Gofore is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Qt Group Oyj and Gofore Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gofore Oyj and Qt Group 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 Qt Group Oyj are associated (or correlated) with Gofore Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gofore Oyj has no effect on the direction of Qt Group i.e., Qt Group and Gofore Oyj go up and down completely randomly.

Pair Corralation between Qt Group and Gofore Oyj

Assuming the 90 days trading horizon Qt Group Oyj is expected to under-perform the Gofore Oyj. In addition to that, Qt Group is 1.68 times more volatile than Gofore Oyj. It trades about -0.05 of its total potential returns per unit of risk. Gofore Oyj is currently generating about -0.02 per unit of volatility. If you would invest  2,275  in Gofore Oyj on October 27, 2024 and sell it today you would lose (75.00) from holding Gofore Oyj or give up 3.3% of portfolio value over 90 days.

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

Qt Group Oyj  vs.  Gofore Oyj

Qt Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qt Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Gofore Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gofore Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Gofore 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 Qt Group and Gofore Oyj

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

The idea behind Qt Group Oyj and Gofore Oyj 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.