Correlation Between IQuest and Prestige Biologics
Can any of the company-specific risk be diversified away by investing in both IQuest and Prestige Biologics 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 Prestige Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Prestige Biologics Co, you can compare the effects of market volatilities on IQuest and Prestige Biologics 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 Prestige Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Prestige Biologics.
Diversification Opportunities for IQuest and Prestige Biologics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IQuest and Prestige is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Prestige Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Biologics 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 Prestige Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Biologics has no effect on the direction of IQuest i.e., IQuest and Prestige Biologics go up and down completely randomly.
Pair Corralation between IQuest and Prestige Biologics
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.04 times more return on investment than Prestige Biologics. However, IQuest is 1.04 times more volatile than Prestige Biologics Co. It trades about 0.12 of its potential returns per unit of risk. Prestige Biologics Co is currently generating about -0.22 per unit of risk. If you would invest 223,000 in IQuest Co on September 5, 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. Prestige Biologics Co
Performance |
| Timeline |
| IQuest |
| Prestige Biologics |
IQuest and Prestige Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Prestige Biologics
The main advantage of trading using opposite IQuest and Prestige Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, Prestige Biologics 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 Prestige Biologics will offset losses from the drop in Prestige Biologics' long position.| IQuest vs. Youngbo Chemical Co | IQuest vs. BGF Retail Co | IQuest vs. Tae Kyung Chemical | IQuest vs. Seoul Broadcasting System |
| Prestige Biologics vs. Myoung Shin Industrial | Prestige Biologics vs. Namhwa Industrial Co | Prestige Biologics vs. Daiyang Metal Co | Prestige Biologics vs. Lotte Non Life Insurance |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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