Correlation Between Quintiles Transnational and IGATE Corp

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Can any of the company-specific risk be diversified away by investing in both Quintiles Transnational and IGATE Corp 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 Quintiles Transnational and IGATE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quintiles Transnational and IGATE Corp, you can compare the effects of market volatilities on Quintiles Transnational and IGATE Corp 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 Quintiles Transnational with a short position of IGATE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintiles Transnational and IGATE Corp.

Diversification Opportunities for Quintiles Transnational and IGATE Corp

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Quintiles and IGATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quintiles Transnational and IGATE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGATE Corp and Quintiles Transnational 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 Quintiles Transnational are associated (or correlated) with IGATE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGATE Corp has no effect on the direction of Quintiles Transnational i.e., Quintiles Transnational and IGATE Corp go up and down completely randomly.

Pair Corralation between Quintiles Transnational and IGATE Corp

If you would invest (100.00) in IGATE Corp on December 29, 2023 and sell it today you would earn a total of  100.00  from holding IGATE Corp or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Quintiles Transnational  vs.  IGATE Corp

 Performance 
       Timeline  
Quintiles Transnational 

Risk-Adjusted Performance

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Over the last 90 days Quintiles Transnational has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Quintiles Transnational is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
IGATE Corp 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days IGATE Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IGATE Corp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Quintiles Transnational and IGATE Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quintiles Transnational and IGATE Corp

The main advantage of trading using opposite Quintiles Transnational and IGATE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quintiles Transnational position performs unexpectedly, IGATE Corp 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 IGATE Corp will offset losses from the drop in IGATE Corp's long position.
The idea behind Quintiles Transnational and IGATE Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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