Correlation Between QT Imaging and BDMDW

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

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

Diversification Opportunities for QT Imaging and BDMDW

0.24

Correlation Coefficient

QT Imaging  BDMDW

Modest diversification

The 3 months correlation between QTI and BDMDW is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding QT Imaging Holdings and BDMDW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDMDW and QT Imaging 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 Imaging Holdings are associated (or correlated) with BDMDW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDMDW has no effect on the direction of QT Imaging i.e., QT Imaging and BDMDW go up and down completely randomly.

Pair Corralation between QT Imaging and BDMDW

Considering the 90-day investment horizon QT Imaging Holdings is expected to under-perform the BDMDW. But the stock apears to be less risky and, when comparing its historical volatility, QT Imaging Holdings is 4.08 times less risky than BDMDW. The stock trades about -0.02 of its potential returns per unit of risk. The BDMDW is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7.00  in BDMDW on September 14, 2024 and sell it today you would lose (4.33) from holding BDMDW or give up 61.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	26.98%
Values	Daily Returns

QT Imaging Holdings  vs.  BDMDW

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, QT Imaging is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

BDMDW

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BDMDW are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, BDMDW showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QT Imaging and BDMDW

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

The idea behind QT Imaging Holdings and BDMDW 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.