Correlation Between Galileo Tech and Queenco L

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

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

Diversification Opportunities for Galileo Tech and Queenco L

-0.68

Correlation Coefficient

Galileo Tech  Queenco L

Excellent diversification

The 3 months correlation between Galileo and Queenco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Galileo Tech and Queenco L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queenco L and Galileo Tech 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 Galileo Tech are associated (or correlated) with Queenco L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queenco L has no effect on the direction of Galileo Tech i.e., Galileo Tech and Queenco L go up and down completely randomly.

Pair Corralation between Galileo Tech and Queenco L

Assuming the 90 days trading horizon Galileo Tech is expected to under-perform the Queenco L. In addition to that, Galileo Tech is 1.06 times more volatile than Queenco L. It trades about -0.01 of its total potential returns per unit of risk. Queenco L is currently generating about 0.43 per unit of volatility. If you would invest  43,690  in Queenco L on September 29, 2024 and sell it today you would earn a total of  30,800  from holding Queenco L or generate 70.5% return on investment over 90 days.

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

Galileo Tech  vs.  Queenco L

Galileo Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galileo Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Queenco L

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Queenco L are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Queenco L sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galileo Tech and Queenco L

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

The idea behind Galileo Tech and Queenco L 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.