Correlation Between Questor Technology and American Hotel

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

By analyzing existing cross correlation between Questor Technology and American Hotel Income, you can compare the effects of market volatilities on Questor Technology and American Hotel 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 American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Questor Technology and American Hotel.

Diversification Opportunities for Questor Technology and American Hotel

-0.23

Correlation Coefficient

Questor Technology  American Hotel

Very good diversification

The 3 months correlation between Questor and American is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Questor Technology and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income 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 American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Questor Technology i.e., Questor Technology and American Hotel go up and down completely randomly.

Pair Corralation between Questor Technology and American Hotel

Assuming the 90 days horizon Questor Technology is expected to under-perform the American Hotel. In addition to that, Questor Technology is 1.0 times more volatile than American Hotel Income. It trades about -0.13 of its total potential returns per unit of risk. American Hotel Income is currently generating about 0.02 per unit of volatility. If you would invest  36.00  in American Hotel Income on August 31, 2024 and sell it today you would earn a total of  0.00  from holding American Hotel Income or generate 0.0% return on investment over 90 days.

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

Questor Technology  vs.  American Hotel Income

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

American Hotel Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Hotel Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, American Hotel is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Questor Technology and American Hotel

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

The idea behind Questor Technology and American Hotel Income 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.