Correlation Between IQuest and EO Technics
Can any of the company-specific risk be diversified away by investing in both IQuest and EO Technics 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 IQuest and EO Technics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and EO Technics Co, you can compare the effects of market volatilities on IQuest and EO Technics 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 IQuest with a short position of EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and EO Technics.
Diversification Opportunities for IQuest and EO Technics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between IQuest and 039030 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics and IQuest 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 IQuest Co are associated (or correlated) with EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of IQuest i.e., IQuest and EO Technics go up and down completely randomly.
Pair Corralation between IQuest and EO Technics
Assuming the 90 days trading horizon IQuest Co is expected to generate 0.81 times more return on investment than EO Technics. However, IQuest Co is 1.24 times less risky than EO Technics. It trades about 0.12 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.27 per unit of risk. If you would invest 223,000 in IQuest Co on August 29, 2024 and sell it today you would earn a total of 19,500 from holding IQuest Co or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. EO Technics Co
Performance |
| Timeline |
| IQuest |
| EO Technics |
IQuest and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and EO Technics
The main advantage of trading using opposite IQuest and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| IQuest vs. iNtRON Biotechnology | IQuest vs. Ilji Technology Co | IQuest vs. Shinhan Inverse Silver | IQuest vs. Konan Technology |
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Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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