Correlation Between Quanex Building and Montana Technologies

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Quanex Building and Montana Technologies 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 Quanex Building and Montana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanex Building Products and Montana Technologies, you can compare the effects of market volatilities on Quanex Building and Montana Technologies 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 Quanex Building with a short position of Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanex Building and Montana Technologies.

Diversification Opportunities for Quanex Building and Montana Technologies

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Quanex and Montana is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Quanex Building Products and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies and Quanex Building 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 Quanex Building Products are associated (or correlated) with Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Quanex Building i.e., Quanex Building and Montana Technologies go up and down completely randomly.

Pair Corralation between Quanex Building and Montana Technologies

Allowing for the 90-day total investment horizon Quanex Building Products is expected to generate 0.36 times more return on investment than Montana Technologies. However, Quanex Building Products is 2.79 times less risky than Montana Technologies. It trades about 0.03 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.06 per unit of risk. If you would invest  2,275  in Quanex Building Products on August 30, 2024 and sell it today you would earn a total of  606.00  from holding Quanex Building Products or generate 26.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy36.9%
ValuesDaily Returns

Quanex Building Products  vs.  Montana Technologies

 Performance 
       Timeline  
Quanex Building Products 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Quanex Building Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Quanex Building may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Montana Technologies 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Montana Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Montana Technologies revealed solid returns over the last few months and may actually be approaching a breakup point.

Quanex Building and Montana Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quanex Building and Montana Technologies

The main advantage of trading using opposite Quanex Building and Montana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanex Building position performs unexpectedly, Montana Technologies 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 Montana Technologies will offset losses from the drop in Montana Technologies' long position.
The idea behind Quanex Building Products and Montana Technologies 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.