Correlation Between Queste Communications and EP Financial
Can any of the company-specific risk be diversified away by investing in both Queste Communications and EP Financial 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 Queste Communications and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Queste Communications and EP Financial Group, you can compare the effects of market volatilities on Queste Communications and EP Financial 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 Queste Communications with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queste Communications and EP Financial.
Diversification Opportunities for Queste Communications and EP Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Queste and EP1 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Queste Communications and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Queste Communications 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 Queste Communications are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Queste Communications i.e., Queste Communications and EP Financial go up and down completely randomly.
Pair Corralation between Queste Communications and EP Financial
Assuming the 90 days trading horizon Queste Communications is expected to under-perform the EP Financial. But the stock apears to be less risky and, when comparing its historical volatility, Queste Communications is 20.66 times less risky than EP Financial. The stock trades about -0.08 of its potential returns per unit of risk. The EP Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 47.00 in EP Financial Group on September 3, 2024 and sell it today you would earn a total of 5.00 from holding EP Financial Group or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Queste Communications vs. EP Financial Group
Performance |
| Timeline |
| Queste Communications |
| EP Financial Group |
Queste Communications and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Queste Communications and EP Financial
The main advantage of trading using opposite Queste Communications and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queste Communications position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Queste Communications vs. Centuria Industrial Reit | Queste Communications vs. Hutchison Telecommunications | Queste Communications vs. Viva Leisure | Queste Communications vs. Aristocrat Leisure |
| EP Financial vs. Audio Pixels Holdings | EP Financial vs. Iodm | EP Financial vs. Nsx | EP Financial vs. TTG Fintech |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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