Correlation Between Q2 Holdings and Centurion Acquisition

Can any of the company-specific risk be diversified away by investing in both Q2 Holdings and Centurion Acquisition 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 Q2 Holdings and Centurion Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2 Holdings and Centurion Acquisition Corp, you can compare the effects of market volatilities on Q2 Holdings and Centurion Acquisition 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 Q2 Holdings with a short position of Centurion Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Holdings and Centurion Acquisition.

Diversification Opportunities for Q2 Holdings and Centurion Acquisition

0.69

Correlation Coefficient

Q2 Holdings  Centurion Acquisition

Poor diversification

The 3 months correlation between QTWO and Centurion is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings and Centurion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centurion Acquisition and Q2 Holdings 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 Q2 Holdings are associated (or correlated) with Centurion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centurion Acquisition has no effect on the direction of Q2 Holdings i.e., Q2 Holdings and Centurion Acquisition go up and down completely randomly.

Pair Corralation between Q2 Holdings and Centurion Acquisition

Given the investment horizon of 90 days Q2 Holdings is expected to under-perform the Centurion Acquisition. In addition to that, Q2 Holdings is 22.95 times more volatile than Centurion Acquisition Corp. It trades about -0.19 of its total potential returns per unit of risk. Centurion Acquisition Corp is currently generating about -0.07 per unit of volatility. If you would invest  1,011  in Centurion Acquisition Corp on October 10, 2024 and sell it today you would lose (1.00) from holding Centurion Acquisition Corp or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Q2 Holdings  vs.  Centurion Acquisition Corp

Q2 Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Q2 Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Centurion Acquisition

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Centurion Acquisition Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Centurion Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Q2 Holdings and Centurion Acquisition

The main advantage of trading using opposite Q2 Holdings and Centurion Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Holdings position performs unexpectedly, Centurion Acquisition 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 Centurion Acquisition will offset losses from the drop in Centurion Acquisition's long position.

The idea behind Q2 Holdings and Centurion Acquisition Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.