Correlation Between Quess Corp and Metropolis Healthcare

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

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

Diversification Opportunities for Quess Corp and Metropolis Healthcare

0.39

Correlation Coefficient

Quess Corp  Metropolis Healthcare

Weak diversification

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

Pair Corralation between Quess Corp and Metropolis Healthcare

Assuming the 90 days trading horizon Quess Corp Limited is expected to under-perform the Metropolis Healthcare. In addition to that, Quess Corp is 1.37 times more volatile than Metropolis Healthcare Limited. It trades about -0.1 of its total potential returns per unit of risk. Metropolis Healthcare Limited is currently generating about -0.06 per unit of volatility. If you would invest  218,050  in Metropolis Healthcare Limited on September 27, 2024 and sell it today you would lose (16,690) from holding Metropolis Healthcare Limited or give up 7.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Quess Corp Limited  vs.  Metropolis Healthcare Limited

Quess Corp Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Metropolis Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metropolis Healthcare Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Quess Corp and Metropolis Healthcare

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

The idea behind Quess Corp Limited and Metropolis Healthcare Limited 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 CEOs Directory module to screen CEOs from public companies around the world.