Correlation Between GI Group and Quantum Software
Can any of the company-specific risk be diversified away by investing in both GI Group and Quantum Software 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 GI Group and Quantum Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GI Group Poland and Quantum Software SA, you can compare the effects of market volatilities on GI Group and Quantum Software 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 GI Group with a short position of Quantum Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of GI Group and Quantum Software.
Diversification Opportunities for GI Group and Quantum Software
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GIG and Quantum is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GI Group Poland and Quantum Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Software and GI Group 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 GI Group Poland are associated (or correlated) with Quantum Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Software has no effect on the direction of GI Group i.e., GI Group and Quantum Software go up and down completely randomly.
Pair Corralation between GI Group and Quantum Software
Assuming the 90 days trading horizon GI Group Poland is expected to generate 0.27 times more return on investment than Quantum Software. However, GI Group Poland is 3.71 times less risky than Quantum Software. It trades about -0.13 of its potential returns per unit of risk. Quantum Software SA is currently generating about -0.09 per unit of risk. If you would invest 148.00 in GI Group Poland on September 12, 2024 and sell it today you would lose (6.00) from holding GI Group Poland or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GI Group Poland vs. Quantum Software SA
Performance |
| Timeline |
| GI Group Poland |
| Quantum Software |
GI Group and Quantum Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GI Group and Quantum Software
The main advantage of trading using opposite GI Group and Quantum Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GI Group position performs unexpectedly, Quantum Software 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 Quantum Software will offset losses from the drop in Quantum Software's long position.| GI Group vs. Intersport Polska SA | GI Group vs. Biztech Konsulting SA | GI Group vs. Quantum Software SA | GI Group vs. Play2Chill SA |
| Quantum Software vs. Asseco Poland SA | Quantum Software vs. Asseco Business Solutions | Quantum Software vs. LSI Software SA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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