Correlation Between Qt Group and Revenio

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

Diversification Opportunities for Qt Group and Revenio

0.28

Correlation Coefficient

Qt Group  Revenio

Modest diversification

The 3 months correlation between QTCOM and Revenio is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Qt Group Oyj and Revenio Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revenio Group 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 Revenio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revenio Group has no effect on the direction of Qt Group i.e., Qt Group and Revenio go up and down completely randomly.

Pair Corralation between Qt Group and Revenio

Assuming the 90 days trading horizon Qt Group Oyj is expected to generate 1.33 times more return on investment than Revenio. However, Qt Group is 1.33 times more volatile than Revenio Group. It trades about 0.18 of its potential returns per unit of risk. Revenio Group is currently generating about -0.01 per unit of risk. If you would invest  6,845  in Qt Group Oyj on November 29, 2024 and sell it today you would earn a total of  1,905  from holding Qt Group Oyj or generate 27.83% return on investment over 90 days.

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

Qt Group Oyj  vs.  Revenio Group

Qt Group Oyj

Risk-Adjusted Performance

Good

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

Revenio Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Revenio Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Revenio is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Qt Group and Revenio

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

The idea behind Qt Group Oyj and Revenio Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.