Correlation Between Questor Technology and Ballard Power

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

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

Diversification Opportunities for Questor Technology and Ballard Power

0.6

Correlation Coefficient

Questor Technology  Ballard Power

Poor diversification

The 3 months correlation between Questor and Ballard is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Questor Technology 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 Questor Technology are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Questor Technology i.e., Questor Technology and Ballard Power go up and down completely randomly.

Pair Corralation between Questor Technology and Ballard Power

Assuming the 90 days horizon Questor Technology is expected to under-perform the Ballard Power. But the stock apears to be less risky and, when comparing its historical volatility, Questor Technology is 1.04 times less risky than Ballard Power. The stock trades about -0.04 of its potential returns per unit of risk. The Ballard Power Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  235.00  in Ballard Power Systems on September 12, 2024 and sell it today you would earn a total of  7.00  from holding Ballard Power Systems or generate 2.98% return on investment over 90 days.

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

Questor Technology  vs.  Ballard Power Systems

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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Ballard Power Systems

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ballard Power Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Ballard Power may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Questor Technology and Ballard Power

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

The idea behind Questor Technology and Ballard Power Systems 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.