Correlation Between Q2 Holdings and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both Q2 Holdings and Bowhead Specialty 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 Q2 Holdings and Bowhead Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q2 Holdings and Bowhead Specialty Holdings, you can compare the effects of market volatilities on Q2 Holdings and Bowhead Specialty 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 Q2 Holdings with a short position of Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Holdings and Bowhead Specialty.
Diversification Opportunities for Q2 Holdings and Bowhead Specialty
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QTWO and Bowhead is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty and Q2 Holdings 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 Q2 Holdings are associated (or correlated) with Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of Q2 Holdings i.e., Q2 Holdings and Bowhead Specialty go up and down completely randomly.
Pair Corralation between Q2 Holdings and Bowhead Specialty
Given the investment horizon of 90 days Q2 Holdings is expected to generate 1.3 times more return on investment than Bowhead Specialty. However, Q2 Holdings is 1.3 times more volatile than Bowhead Specialty Holdings. It trades about 0.09 of its potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about 0.09 per unit of risk. If you would invest 3,146 in Q2 Holdings on October 16, 2024 and sell it today you would earn a total of 6,098 from holding Q2 Holdings or generate 193.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.53% |
| Values | Daily Returns |
Q2 Holdings vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| Q2 Holdings |
| Bowhead Specialty |
Q2 Holdings and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2 Holdings and Bowhead Specialty
The main advantage of trading using opposite Q2 Holdings and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Holdings position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| Q2 Holdings vs. PROS Holdings | Q2 Holdings vs. Meridianlink | Q2 Holdings vs. Enfusion | Q2 Holdings vs. Paylocity Holdng |
| Bowhead Specialty vs. Pinterest | Bowhead Specialty vs. Beauty Health Co | Bowhead Specialty vs. Q2 Holdings | Bowhead Specialty vs. Timken Company |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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