Correlation Between Bank Central and Qsam Biosciences

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

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

Diversification Opportunities for Bank Central and Qsam Biosciences

0.82

Correlation Coefficient

Bank Central  Qsam Biosciences

Very poor diversification

The 3 months correlation between Bank and Qsam is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Qsam Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qsam Biosciences and Bank Central 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 Bank Central Asia are associated (or correlated) with Qsam Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qsam Biosciences has no effect on the direction of Bank Central i.e., Bank Central and Qsam Biosciences go up and down completely randomly.

Pair Corralation between Bank Central and Qsam Biosciences

If you would invest  1,570  in Bank Central Asia on September 15, 2024 and sell it today you would earn a total of  20.00  from holding Bank Central Asia or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	4.76%
Values	Daily Returns

Bank Central Asia  vs.  Qsam Biosciences

Bank Central Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qsam Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qsam Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Qsam Biosciences is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bank Central and Qsam Biosciences

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

The idea behind Bank Central Asia and Qsam Biosciences 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.