Correlation Between Q2 Holdings and Where Food

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

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

Diversification Opportunities for Q2 Holdings and Where Food

0.75

Correlation Coefficient

Q2 Holdings  Where Food

Poor diversification

The 3 months correlation between QTWO and Where is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes 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 Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Q2 Holdings i.e., Q2 Holdings and Where Food go up and down completely randomly.

Pair Corralation between Q2 Holdings and Where Food

Given the investment horizon of 90 days Q2 Holdings is expected to under-perform the Where Food. But the stock apears to be less risky and, when comparing its historical volatility, Q2 Holdings is 1.06 times less risky than Where Food. The stock trades about -0.11 of its potential returns per unit of risk. The Where Food Comes is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,295  in Where Food Comes on December 27, 2024 and sell it today you would lose (152.00) from holding Where Food Comes or give up 11.74% of portfolio value over 90 days.

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

Q2 Holdings  vs.  Where Food Comes

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.

Where Food Comes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Where Food Comes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Q2 Holdings and Where Food

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

The idea behind Q2 Holdings and Where Food Comes 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.