Correlation Between Qt Group and Sitowise Group

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

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

Diversification Opportunities for Qt Group and Sitowise Group

0.54

Correlation Coefficient

Qt Group  Sitowise Group

Very weak diversification

The 3 months correlation between QTCOM and Sitowise is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Qt Group Oyj and Sitowise Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitowise Group Oyj and Qt 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 Qt Group Oyj are associated (or correlated) with Sitowise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitowise Group Oyj has no effect on the direction of Qt Group i.e., Qt Group and Sitowise Group go up and down completely randomly.

Pair Corralation between Qt Group and Sitowise Group

Assuming the 90 days trading horizon Qt Group Oyj is expected to under-perform the Sitowise Group. But the stock apears to be less risky and, when comparing its historical volatility, Qt Group Oyj is 2.9 times less risky than Sitowise Group. The stock trades about -0.06 of its potential returns per unit of risk. The Sitowise Group Oyj is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  234.00  in Sitowise Group Oyj on September 27, 2024 and sell it today you would earn a total of  56.00  from holding Sitowise Group Oyj or generate 23.93% return on investment over 90 days.

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

Qt Group Oyj  vs.  Sitowise Group Oyj

Qt Group Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qt Group Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sitowise Group Oyj

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sitowise Group Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Sitowise Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Qt Group and Sitowise Group

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

The idea behind Qt Group Oyj and Sitowise Group Oyj 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.