Correlation Between British Amer and Questor Technology

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

By analyzing existing cross correlation between biOasis Technologies and Questor Technology, you can compare the effects of market volatilities on British Amer and Questor Technology 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 British Amer with a short position of Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Questor Technology.

Diversification Opportunities for British Amer and Questor Technology

0.28

Correlation Coefficient

British Amer  Questor Technology

Modest diversification

The 3 months correlation between British and Questor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding biOasis Technologies and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and British Amer 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 biOasis Technologies are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of British Amer i.e., British Amer and Questor Technology go up and down completely randomly.

Pair Corralation between British Amer and Questor Technology

Assuming the 90 days horizon biOasis Technologies is expected to generate 66.29 times more return on investment than Questor Technology. However, British Amer is 66.29 times more volatile than Questor Technology. It trades about 0.25 of its potential returns per unit of risk. Questor Technology is currently generating about -0.12 per unit of risk. If you would invest  118.00  in biOasis Technologies on September 1, 2024 and sell it today you would earn a total of  8.00  from holding biOasis Technologies or generate 6.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

biOasis Technologies  vs.  Questor Technology

biOasis Technologies

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in biOasis Technologies are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, British Amer showed solid returns over the last few months and may actually be approaching a breakup point.

Questor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Questor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with British Amer and Questor Technology

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

The idea behind biOasis Technologies and Questor Technology 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.