Correlation Between Questor Technology and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Questor Technology and Dow Jones 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 Questor Technology and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Questor Technology and Dow Jones Industrial, you can compare the effects of market volatilities on Questor Technology and Dow Jones 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 Questor Technology with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Questor Technology and Dow Jones.
Diversification Opportunities for Questor Technology and Dow Jones
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Questor and Dow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Questor Technology 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 Questor Technology are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Questor Technology i.e., Questor Technology and Dow Jones go up and down completely randomly.
Pair Corralation between Questor Technology and Dow Jones
Assuming the 90 days horizon Questor Technology is expected to generate 10.8 times more return on investment than Dow Jones. However, Questor Technology is 10.8 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.05 per unit of risk. If you would invest 26.00 in Questor Technology on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Questor Technology or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Questor Technology vs. Dow Jones Industrial
Performance |
| Timeline |
Questor Technology and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Questor Technology
Pair trading matchups for Questor Technology
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Questor Technology and Dow Jones
The main advantage of trading using opposite Questor Technology and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Questor Technology position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Questor Technology vs. Federal Signal | Questor Technology vs. Energy Recovery | Questor Technology vs. CECO Environmental Corp | Questor Technology vs. 374Water Common Stock |
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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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