Correlation Between Qt Group and SSH Communications
Can any of the company-specific risk be diversified away by investing in both Qt Group and SSH Communications 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 Qt Group and SSH Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qt Group Oyj and SSH Communications Security, you can compare the effects of market volatilities on Qt Group and SSH Communications 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 Qt Group with a short position of SSH Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qt Group and SSH Communications.
Diversification Opportunities for Qt Group and SSH Communications
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QTCOM and SSH is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Qt Group Oyj and SSH Communications Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSH Communications and Qt 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 Qt Group Oyj are associated (or correlated) with SSH Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSH Communications has no effect on the direction of Qt Group i.e., Qt Group and SSH Communications go up and down completely randomly.
Pair Corralation between Qt Group and SSH Communications
Assuming the 90 days trading horizon Qt Group Oyj is expected to generate 0.92 times more return on investment than SSH Communications. However, Qt Group Oyj is 1.08 times less risky than SSH Communications. It trades about 0.02 of its potential returns per unit of risk. SSH Communications Security is currently generating about -0.03 per unit of risk. If you would invest 6,418 in Qt Group Oyj on August 24, 2024 and sell it today you would earn a total of 262.00 from holding Qt Group Oyj or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qt Group Oyj vs. SSH Communications Security
Performance |
| Timeline |
| Qt Group Oyj |
| SSH Communications |
Qt Group and SSH Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qt Group and SSH Communications
The main advantage of trading using opposite Qt Group and SSH Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qt Group position performs unexpectedly, SSH Communications 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 SSH Communications will offset losses from the drop in SSH Communications' long position.| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia Oyj |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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