Correlation Between Qinetiq Group and National Atomic

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

By analyzing existing cross correlation between Qinetiq Group PLC and National Atomic Co, you can compare the effects of market volatilities on Qinetiq Group and National Atomic 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 Qinetiq Group with a short position of National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinetiq Group and National Atomic.

Diversification Opportunities for Qinetiq Group and National Atomic

-0.36

Correlation Coefficient

Qinetiq Group  National Atomic

Very good diversification

The 3 months correlation between Qinetiq and National is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Qinetiq Group PLC and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic and Qinetiq Group 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 Qinetiq Group PLC are associated (or correlated) with National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Qinetiq Group i.e., Qinetiq Group and National Atomic go up and down completely randomly.

Pair Corralation between Qinetiq Group and National Atomic

Assuming the 90 days trading horizon Qinetiq Group PLC is expected to under-perform the National Atomic. But the stock apears to be less risky and, when comparing its historical volatility, Qinetiq Group PLC is 1.09 times less risky than National Atomic. The stock trades about -0.07 of its potential returns per unit of risk. The National Atomic Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,635  in National Atomic Co on September 5, 2024 and sell it today you would earn a total of  425.00  from holding National Atomic Co or generate 11.69% return on investment over 90 days.

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

Qinetiq Group PLC  vs.  National Atomic Co

Qinetiq Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qinetiq Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

National Atomic

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, National Atomic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Qinetiq Group and National Atomic

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

The idea behind Qinetiq Group PLC and National Atomic Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.