Correlation Between QST International and Khgears International
Can any of the company-specific risk be diversified away by investing in both QST International and Khgears International 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 Khgears International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QST International and Khgears International Limited, you can compare the effects of market volatilities on QST International and Khgears International 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 Khgears International. Check out your portfolio center. Please also check ongoing floating volatility patterns of QST International and Khgears International.
Diversification Opportunities for QST International and Khgears International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QST and Khgears is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding QST International and Khgears International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khgears International 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 Khgears International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khgears International has no effect on the direction of QST International i.e., QST International and Khgears International go up and down completely randomly.
Pair Corralation between QST International and Khgears International
Assuming the 90 days trading horizon QST International is expected to under-perform the Khgears International. But the stock apears to be less risky and, when comparing its historical volatility, QST International is 5.91 times less risky than Khgears International. The stock trades about -0.32 of its potential returns per unit of risk. The Khgears International Limited is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 16,300 in Khgears International Limited on September 22, 2024 and sell it today you would earn a total of 8,900 from holding Khgears International Limited or generate 54.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QST International vs. Khgears International Limited
Performance |
| Timeline |
| QST International |
| Khgears International |
QST International and Khgears International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QST International and Khgears International
The main advantage of trading using opposite QST International and Khgears International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QST International position performs unexpectedly, Khgears International 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 Khgears International will offset losses from the drop in Khgears International's long position.| QST International vs. Yang Ming Marine | QST International vs. Evergreen Marine Corp | QST International vs. Eva Airways Corp | QST International vs. U Ming Marine Transport |
| Khgears International vs. Hiwin Technologies Corp | Khgears International vs. Brighton Best International Taiwan | Khgears International vs. San Shing Fastech | Khgears International vs. QST International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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