Correlation Between Xtract One and Questor Technology

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

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

Diversification Opportunities for Xtract One and Questor Technology

0.06

Correlation Coefficient

Xtract One  Questor Technology

Significant diversification

The 3 months correlation between Xtract and Questor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and Xtract One 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 Xtract One Technologies are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Xtract One i.e., Xtract One and Questor Technology go up and down completely randomly.

Pair Corralation between Xtract One and Questor Technology

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Questor Technology. In addition to that, Xtract One is 1.54 times more volatile than Questor Technology. It trades about -0.23 of its total potential returns per unit of risk. Questor Technology is currently generating about 0.17 per unit of volatility. If you would invest  28.00  in Questor Technology on September 27, 2024 and sell it today you would earn a total of  4.00  from holding Questor Technology or generate 14.29% return on investment over 90 days.

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

Xtract One Technologies  vs.  Questor Technology

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 weak 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.

Pair Trading with Xtract One and Questor Technology

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

The idea behind Xtract One Technologies and Questor Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.