Correlation Between SGF Capital and Qualitech Public

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

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

Diversification Opportunities for SGF Capital and Qualitech Public

-0.12

Correlation Coefficient

SGF Capital  Qualitech Public

Good diversification

The 3 months correlation between SGF and Qualitech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SGF Capital Public and Qualitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualitech Public and SGF Capital 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 SGF Capital Public are associated (or correlated) with Qualitech Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualitech Public has no effect on the direction of SGF Capital i.e., SGF Capital and Qualitech Public go up and down completely randomly.

Pair Corralation between SGF Capital and Qualitech Public

Assuming the 90 days trading horizon SGF Capital Public is expected to under-perform the Qualitech Public. In addition to that, SGF Capital is 1.11 times more volatile than Qualitech Public. It trades about -0.19 of its total potential returns per unit of risk. Qualitech Public is currently generating about 0.42 per unit of volatility. If you would invest  199.00  in Qualitech Public on October 15, 2024 and sell it today you would earn a total of  67.00  from holding Qualitech Public or generate 33.67% return on investment over 90 days.

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

SGF Capital Public  vs.  Qualitech Public

SGF Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGF Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Qualitech Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qualitech Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Qualitech Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SGF Capital and Qualitech Public

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

The idea behind SGF Capital Public and Qualitech Public 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.