Correlation Between HP and QuickLogic

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Can any of the company-specific risk be diversified away by investing in both HP and QuickLogic 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 HP and QuickLogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and QuickLogic, you can compare the effects of market volatilities on HP and QuickLogic 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 HP with a short position of QuickLogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and QuickLogic.

Diversification Opportunities for HP and QuickLogic

HPQuickLogicDiversified AwayHPQuickLogicDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between HP and QuickLogic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and QuickLogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuickLogic and HP 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 HP Inc are associated (or correlated) with QuickLogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuickLogic has no effect on the direction of HP i.e., HP and QuickLogic go up and down completely randomly.

Pair Corralation between HP and QuickLogic

Considering the 90-day investment horizon HP Inc is expected to generate 0.2 times more return on investment than QuickLogic. However, HP Inc is 4.88 times less risky than QuickLogic. It trades about 0.25 of its potential returns per unit of risk. QuickLogic is currently generating about -0.18 per unit of risk. If you would invest  3,273  in HP Inc on November 25, 2024 and sell it today you would earn a total of  190.00  from holding HP Inc or generate 5.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

HP Inc  vs.  QuickLogic

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15HPQ QUIK
       Timeline  
HP Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb313233343536373839
QuickLogic 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days QuickLogic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, QuickLogic is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb78910111213

HP and QuickLogic Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.27-2.45-1.63-0.810.00.791.592.393.19 0.020.040.060.08
JavaScript chart by amCharts 3.21.15HPQ QUIK
       Returns  

Pair Trading with HP and QuickLogic

The main advantage of trading using opposite HP and QuickLogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, QuickLogic 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 QuickLogic will offset losses from the drop in QuickLogic's long position.
The idea behind HP Inc and QuickLogic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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