Correlation Between Quest For and Fountain
Can any of the company-specific risk be diversified away by investing in both Quest For and Fountain 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 Quest For and Fountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quest For Growth and Fountain, you can compare the effects of market volatilities on Quest For and Fountain 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 Quest For with a short position of Fountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quest For and Fountain.
Diversification Opportunities for Quest For and Fountain
Poor diversification
The 3 months correlation between Quest and Fountain is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Quest For Growth and Fountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fountain and Quest For 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 Quest For Growth are associated (or correlated) with Fountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fountain has no effect on the direction of Quest For i.e., Quest For and Fountain go up and down completely randomly.
Pair Corralation between Quest For and Fountain
Assuming the 90 days trading horizon Quest For Growth is expected to under-perform the Fountain. But the stock apears to be less risky and, when comparing its historical volatility, Quest For Growth is 3.85 times less risky than Fountain. The stock trades about -0.1 of its potential returns per unit of risk. The Fountain is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Fountain on September 12, 2024 and sell it today you would lose (3.00) from holding Fountain or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Quest For Growth vs. Fountain
Performance |
| Timeline |
| Quest For Growth |
| Fountain |
Quest For and Fountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quest For and Fountain
The main advantage of trading using opposite Quest For and Fountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quest For position performs unexpectedly, Fountain 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 Fountain will offset losses from the drop in Fountain's long position.| Quest For vs. GIMV NV | Quest For vs. Brederode SA | Quest For vs. Groep Brussel Lambert | Quest For vs. Sofina Socit Anonyme |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |