Correlation Between SSH Communications and Qt Group
Can any of the company-specific risk be diversified away by investing in both SSH Communications and Qt Group 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 SSH Communications and Qt Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSH Communications Security and Qt Group Oyj, you can compare the effects of market volatilities on SSH Communications and Qt Group 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 SSH Communications with a short position of Qt Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and Qt Group.
Diversification Opportunities for SSH Communications and Qt Group
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SSH and QTCOM is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group Oyj and SSH 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 SSH Communications Security are associated (or correlated) with Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of SSH Communications i.e., SSH Communications and Qt Group go up and down completely randomly.
Pair Corralation between SSH Communications and Qt Group
Assuming the 90 days trading horizon SSH Communications Security is expected to generate 0.9 times more return on investment than Qt Group. However, SSH Communications Security is 1.11 times less risky than Qt Group. It trades about -0.17 of its potential returns per unit of risk. Qt Group Oyj is currently generating about -0.23 per unit of risk. If you would invest 123.00 in SSH Communications Security on August 28, 2024 and sell it today you would lose (18.00) from holding SSH Communications Security or give up 14.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSH Communications Security vs. Qt Group Oyj
Performance |
| Timeline |
| SSH Communications |
| Qt Group Oyj |
SSH Communications and Qt Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSH Communications and Qt Group
The main advantage of trading using opposite SSH Communications and Qt Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications position performs unexpectedly, Qt Group 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 Qt Group will offset losses from the drop in Qt Group's long position.| SSH Communications vs. Tecnotree Oyj | SSH Communications vs. Qt Group Oyj | SSH Communications vs. Bittium Oyj | SSH Communications vs. Harvia Oyj |
| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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