Correlation Between Q2 Holdings and GobiMin

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

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

Diversification Opportunities for Q2 Holdings and GobiMin

0.39

Correlation Coefficient

Q2 Holdings  GobiMin

Weak diversification

The 3 months correlation between QTWO and GobiMin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin 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 GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of Q2 Holdings i.e., Q2 Holdings and GobiMin go up and down completely randomly.

Pair Corralation between Q2 Holdings and GobiMin

If you would invest  127.00  in GobiMin on September 24, 2024 and sell it today you would earn a total of  0.00  from holding GobiMin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Q2 Holdings  vs.  GobiMin

Q2 Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Holdings are ranked lower than 16 (%) 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.

GobiMin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Q2 Holdings and GobiMin

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

The idea behind Q2 Holdings and GobiMin 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 .