Correlation Between Quisitive Technology and Northstar Clean

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

By analyzing existing cross correlation between Quisitive Technology Solutions and Northstar Clean Technologies, you can compare the effects of market volatilities on Quisitive Technology and Northstar Clean 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 Quisitive Technology with a short position of Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quisitive Technology and Northstar Clean.

Diversification Opportunities for Quisitive Technology and Northstar Clean

0.58

Correlation Coefficient

Quisitive Technology  Northstar Clean

Very weak diversification

The 3 months correlation between Quisitive and Northstar is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Quisitive Technology Solutions and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech and Quisitive Technology 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 Quisitive Technology Solutions are associated (or correlated) with Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Quisitive Technology i.e., Quisitive Technology and Northstar Clean go up and down completely randomly.

Pair Corralation between Quisitive Technology and Northstar Clean

Assuming the 90 days trading horizon Quisitive Technology Solutions is expected to generate 0.23 times more return on investment than Northstar Clean. However, Quisitive Technology Solutions is 4.28 times less risky than Northstar Clean. It trades about 0.13 of its potential returns per unit of risk. Northstar Clean Technologies is currently generating about -0.11 per unit of risk. If you would invest  55.00  in Quisitive Technology Solutions on December 2, 2024 and sell it today you would earn a total of  2.00  from holding Quisitive Technology Solutions or generate 3.64% return on investment over 90 days.

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

Quisitive Technology Solutions  vs.  Northstar Clean Technologies

Quisitive Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quisitive Technology Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Quisitive Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Northstar Clean Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Northstar Clean Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Northstar Clean showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quisitive Technology and Northstar Clean

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

The idea behind Quisitive Technology Solutions and Northstar Clean Technologies 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.