Correlation Between Sharing Services and Qed Connect

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

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

Diversification Opportunities for Sharing Services and Qed Connect

0.48

Correlation Coefficient

Sharing Services  Qed Connect

Very weak diversification

The 3 months correlation between Sharing and Qed is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sharing Services Global and Qed Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qed Connect and Sharing Services 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 Sharing Services Global are associated (or correlated) with Qed Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qed Connect has no effect on the direction of Sharing Services i.e., Sharing Services and Qed Connect go up and down completely randomly.

Pair Corralation between Sharing Services and Qed Connect

Given the investment horizon of 90 days Sharing Services Global is expected to generate 1.03 times more return on investment than Qed Connect. However, Sharing Services is 1.03 times more volatile than Qed Connect. It trades about 0.3 of its potential returns per unit of risk. Qed Connect is currently generating about -0.02 per unit of risk. If you would invest  18.00  in Sharing Services Global on September 3, 2024 and sell it today you would earn a total of  17.00  from holding Sharing Services Global or generate 94.44% return on investment over 90 days.

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

Sharing Services Global  vs.  Qed Connect

Sharing Services Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharing Services Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Qed Connect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qed Connect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Qed Connect is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sharing Services and Qed Connect

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

The idea behind Sharing Services Global and Qed Connect 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.