Correlation Between Xp and QT Imaging

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

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

Diversification Opportunities for Xp and QT Imaging

0.59

Correlation Coefficient

Xp  QT Imaging

Very weak diversification

The 3 months correlation between Xp and QTI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings and Xp 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 Xp Inc are associated (or correlated) with QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Xp i.e., Xp and QT Imaging go up and down completely randomly.

Pair Corralation between Xp and QT Imaging

Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the QT Imaging. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 2.7 times less risky than QT Imaging. The stock trades about -0.22 of its potential returns per unit of risk. The QT Imaging Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  60.00  in QT Imaging Holdings on September 15, 2024 and sell it today you would lose (10.00) from holding QT Imaging Holdings or give up 16.67% of portfolio value over 90 days.

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

Xp Inc  vs.  QT Imaging Holdings

Xp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Xp and QT Imaging

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

The idea behind Xp Inc and QT Imaging Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.