Correlation Between Stingray and Quarterhill

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

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

Diversification Opportunities for Stingray and Quarterhill

-0.23

Correlation Coefficient

Stingray  Quarterhill

Very good diversification

The 3 months correlation between Stingray and Quarterhill is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Stingray Group and Quarterhill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quarterhill and Stingray 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 Stingray Group are associated (or correlated) with Quarterhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quarterhill has no effect on the direction of Stingray i.e., Stingray and Quarterhill go up and down completely randomly.

Pair Corralation between Stingray and Quarterhill

Assuming the 90 days trading horizon Stingray is expected to generate 2.59 times less return on investment than Quarterhill. But when comparing it to its historical volatility, Stingray Group is 1.76 times less risky than Quarterhill. It trades about 0.05 of its potential returns per unit of risk. Quarterhill is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  153.00  in Quarterhill on September 16, 2024 and sell it today you would earn a total of  19.00  from holding Quarterhill or generate 12.42% return on investment over 90 days.

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

Stingray Group  vs.  Quarterhill

Stingray Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stingray Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Stingray is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Quarterhill

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quarterhill are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Quarterhill displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stingray and Quarterhill

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

The idea behind Stingray Group and Quarterhill 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.