Correlation Between Ballard Power and Questor Technology
Can any of the company-specific risk be diversified away by investing in both Ballard Power and Questor 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 Ballard Power and Questor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and Questor Technology, you can compare the effects of market volatilities on Ballard Power and Questor 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 Ballard Power with a short position of Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Questor Technology.
Diversification Opportunities for Ballard Power and Questor Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ballard and Questor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and Ballard Power 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 Ballard Power Systems are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Ballard Power i.e., Ballard Power and Questor Technology go up and down completely randomly.
Pair Corralation between Ballard Power and Questor Technology
Assuming the 90 days trading horizon Ballard Power Systems is expected to generate 1.44 times more return on investment than Questor Technology. However, Ballard Power is 1.44 times more volatile than Questor Technology. It trades about -0.06 of its potential returns per unit of risk. Questor Technology is currently generating about -0.27 per unit of risk. If you would invest 240.00 in Ballard Power Systems on September 4, 2024 and sell it today you would lose (24.00) from holding Ballard Power Systems or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ballard Power Systems vs. Questor Technology
Performance |
| Timeline |
| Ballard Power Systems |
| Questor Technology |
Ballard Power and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and Questor Technology
The main advantage of trading using opposite Ballard Power and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power position performs unexpectedly, Questor 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| Ballard Power vs. Brookfield Office Properties | Ballard Power vs. Toronto Dominion Bank | Ballard Power vs. Partners Value Investments | Ballard Power vs. Intact Financial Corp |
| Questor Technology vs. Solar Alliance Energy | Questor Technology vs. iShares Canadian HYBrid | Questor Technology vs. Altagas Cum Red | Questor Technology vs. European Residential Real |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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