Correlation Between Xtract One and Quipt Home

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

By analyzing existing cross correlation between Xtract One Technologies and Quipt Home Medical, you can compare the effects of market volatilities on Xtract One and Quipt Home 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 Xtract One with a short position of Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Quipt Home.

Diversification Opportunities for Xtract One and Quipt Home

-0.16

Correlation Coefficient

Xtract One  Quipt Home

Good diversification

The 3 months correlation between Xtract and Quipt is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical and Xtract One 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 Xtract One Technologies are associated (or correlated) with Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of Xtract One i.e., Xtract One and Quipt Home go up and down completely randomly.

Pair Corralation between Xtract One and Quipt Home

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Quipt Home. In addition to that, Xtract One is 1.2 times more volatile than Quipt Home Medical. It trades about -0.04 of its total potential returns per unit of risk. Quipt Home Medical is currently generating about 0.09 per unit of volatility. If you would invest  370.00  in Quipt Home Medical on October 8, 2024 and sell it today you would earn a total of  67.00  from holding Quipt Home Medical or generate 18.11% return on investment over 90 days.

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

Xtract One Technologies  vs.  Quipt Home Medical

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Quipt Home Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quipt Home Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Quipt Home displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtract One and Quipt Home

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

The idea behind Xtract One Technologies and Quipt Home Medical 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.