Correlation Between Queste Communications and SG Fleet

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

By analyzing existing cross correlation between Queste Communications and SG Fleet Group, you can compare the effects of market volatilities on Queste Communications and SG Fleet 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 Queste Communications with a short position of SG Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queste Communications and SG Fleet.

Diversification Opportunities for Queste Communications and SG Fleet

-0.69

Correlation Coefficient

Queste Communications  SG Fleet

Excellent diversification

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

Pair Corralation between Queste Communications and SG Fleet

Assuming the 90 days trading horizon Queste Communications is expected to generate 5.15 times less return on investment than SG Fleet. In addition to that, Queste Communications is 1.21 times more volatile than SG Fleet Group. It trades about 0.02 of its total potential returns per unit of risk. SG Fleet Group is currently generating about 0.1 per unit of volatility. If you would invest  218.00  in SG Fleet Group on October 24, 2024 and sell it today you would earn a total of  126.00  from holding SG Fleet Group or generate 57.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Queste Communications  vs.  SG Fleet Group

Queste Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Queste Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SG Fleet Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SG Fleet Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SG Fleet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Queste Communications and SG Fleet

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

The idea behind Queste Communications and SG Fleet 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..