Correlation Between Where Food and Q2 Holdings

Can any of the company-specific risk be diversified away by investing in both Where Food and Q2 Holdings 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 Where Food and Q2 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Where Food Comes and Q2 Holdings, you can compare the effects of market volatilities on Where Food and Q2 Holdings 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 Where Food with a short position of Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Where Food and Q2 Holdings.

Diversification Opportunities for Where Food and Q2 Holdings

0.68

Correlation Coefficient

Where Food  Q2 Holdings

Poor diversification

The 3 months correlation between Where and QTWO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings and Where Food 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 Where Food Comes are associated (or correlated) with Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of Where Food i.e., Where Food and Q2 Holdings go up and down completely randomly.

Pair Corralation between Where Food and Q2 Holdings

Given the investment horizon of 90 days Where Food is expected to generate 5.44 times less return on investment than Q2 Holdings. But when comparing it to its historical volatility, Where Food Comes is 1.54 times less risky than Q2 Holdings. It trades about 0.07 of its potential returns per unit of risk. Q2 Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  7,225  in Q2 Holdings on September 3, 2024 and sell it today you would earn a total of  3,249  from holding Q2 Holdings or generate 44.97% return on investment over 90 days.

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

Where Food Comes  vs.  Q2 Holdings

Where Food Comes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Where Food Comes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Where Food may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Q2 Holdings

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Holdings are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Q2 Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Where Food and Q2 Holdings

The main advantage of trading using opposite Where Food and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.

The idea behind Where Food Comes and Q2 Holdings 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.