Correlation Between Alpha and QuickLogic

Can any of the company-specific risk be diversified away by investing in both Alpha and QuickLogic 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 Alpha and QuickLogic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpha and Omega and QuickLogic, you can compare the effects of market volatilities on Alpha and QuickLogic 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 Alpha with a short position of QuickLogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha and QuickLogic.

Diversification Opportunities for Alpha and QuickLogic

0.32

Correlation Coefficient

Alpha  QuickLogic

Weak diversification

The 3 months correlation between Alpha and QuickLogic is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alpha and Omega and QuickLogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuickLogic and Alpha 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 Alpha and Omega are associated (or correlated) with QuickLogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuickLogic has no effect on the direction of Alpha i.e., Alpha and QuickLogic go up and down completely randomly.

Pair Corralation between Alpha and QuickLogic

Given the investment horizon of 90 days Alpha and Omega is expected to generate 1.92 times more return on investment than QuickLogic. However, Alpha is 1.92 times more volatile than QuickLogic. It trades about 0.06 of its potential returns per unit of risk. QuickLogic is currently generating about 0.05 per unit of risk. If you would invest  3,591  in Alpha and Omega on September 4, 2024 and sell it today you would earn a total of  548.00  from holding Alpha and Omega or generate 15.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alpha and Omega  vs.  QuickLogic

Alpha and Omega

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha and Omega are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Alpha disclosed solid returns over the last few months and may actually be approaching a breakup point.

QuickLogic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QuickLogic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal forward indicators, QuickLogic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alpha and QuickLogic

The main advantage of trading using opposite Alpha and QuickLogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha position performs unexpectedly, QuickLogic 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 QuickLogic will offset losses from the drop in QuickLogic's long position.

The idea behind Alpha and Omega and QuickLogic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.