Correlation Between Q2 Holdings and ReWalk Robotics

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

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

Diversification Opportunities for Q2 Holdings and ReWalk Robotics

0.22

Correlation Coefficient

Q2 Holdings  ReWalk Robotics

Modest diversification

The 3 months correlation between QTWO and ReWalk is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings and ReWalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReWalk Robotics 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 ReWalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReWalk Robotics has no effect on the direction of Q2 Holdings i.e., Q2 Holdings and ReWalk Robotics go up and down completely randomly.

Pair Corralation between Q2 Holdings and ReWalk Robotics

Given the investment horizon of 90 days Q2 Holdings is expected to under-perform the ReWalk Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Q2 Holdings is 3.87 times less risky than ReWalk Robotics. The stock trades about -0.11 of its potential returns per unit of risk. The ReWalk Robotics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  201.00  in ReWalk Robotics on December 27, 2024 and sell it today you would lose (18.00) from holding ReWalk Robotics or give up 8.96% of portfolio value over 90 days.

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

Q2 Holdings  vs.  ReWalk Robotics

Q2 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Q2 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ReWalk Robotics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ReWalk Robotics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ReWalk Robotics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Q2 Holdings and ReWalk Robotics

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

The idea behind Q2 Holdings and ReWalk Robotics 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.