Correlation Between QST International and Advantech
Can any of the company-specific risk be diversified away by investing in both QST International and Advantech 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 QST International and Advantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QST International and Advantech Co, you can compare the effects of market volatilities on QST International and Advantech 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 QST International with a short position of Advantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of QST International and Advantech.
Diversification Opportunities for QST International and Advantech
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QST and Advantech is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding QST International and Advantech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantech and QST International 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 QST International are associated (or correlated) with Advantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantech has no effect on the direction of QST International i.e., QST International and Advantech go up and down completely randomly.
Pair Corralation between QST International and Advantech
Assuming the 90 days trading horizon QST International is expected to generate 10.76 times less return on investment than Advantech. But when comparing it to its historical volatility, QST International is 1.95 times less risky than Advantech. It trades about 0.03 of its potential returns per unit of risk. Advantech Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 37,450 in Advantech Co on December 1, 2024 and sell it today you would earn a total of 3,150 from holding Advantech Co or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QST International vs. Advantech Co
Performance |
| Timeline |
| QST International |
| Advantech |
QST International and Advantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QST International and Advantech
The main advantage of trading using opposite QST International and Advantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QST International position performs unexpectedly, Advantech 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 Advantech will offset losses from the drop in Advantech's long position.| QST International vs. Hota Industrial Mfg | QST International vs. BizLink Holding | QST International vs. Flexium Interconnect | QST International vs. Chen Full International |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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