Correlation Between IQuest and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both IQuest and NewFlex Technology 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 NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and NewFlex Technology Co, you can compare the effects of market volatilities on IQuest and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and NewFlex Technology.
Diversification Opportunities for IQuest and NewFlex Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IQuest and NewFlex is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of IQuest i.e., IQuest and NewFlex Technology go up and down completely randomly.
Pair Corralation between IQuest and NewFlex Technology
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.52 times more return on investment than NewFlex Technology. However, IQuest is 1.52 times more volatile than NewFlex Technology Co. It trades about 0.18 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.28 per unit of risk. If you would invest 221,000 in IQuest Co on August 25, 2024 and sell it today you would earn a total of 28,500 from holding IQuest Co or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. NewFlex Technology Co
Performance |
| Timeline |
| IQuest |
| NewFlex Technology |
IQuest and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and NewFlex Technology
The main advantage of trading using opposite IQuest and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| IQuest vs. Coloray International Investment | IQuest vs. DSC Investment | IQuest vs. Air Busan Co | IQuest vs. EBEST Investment Securities |
| NewFlex Technology vs. Korea Real Estate | NewFlex Technology vs. Korea Ratings Co | NewFlex Technology vs. IQuest Co | NewFlex Technology vs. Wonbang Tech Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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