Correlation Between Quanergy Systems and Bonso Electronics

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

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

Diversification Opportunities for Quanergy Systems and Bonso Electronics

0.35

Correlation Coefficient

Quanergy Systems  Bonso Electronics

Weak diversification

The 3 months correlation between Quanergy and Bonso is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Quanergy Systems and Bonso Electronics Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonso Electronics and Quanergy Systems 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 Quanergy Systems are associated (or correlated) with Bonso Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonso Electronics has no effect on the direction of Quanergy Systems i.e., Quanergy Systems and Bonso Electronics go up and down completely randomly.

Pair Corralation between Quanergy Systems and Bonso Electronics

If you would invest  259.00  in Bonso Electronics International on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Bonso Electronics International or generate 0.0% return on investment over 90 days.

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

Quanergy Systems  vs.  Bonso Electronics Internationa

Quanergy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quanergy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Quanergy Systems is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Bonso Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Quanergy Systems and Bonso Electronics

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

The idea behind Quanergy Systems and Bonso Electronics International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.