Correlation Between Quant and Netcompany Group

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

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

Diversification Opportunities for Quant and Netcompany Group

0.28

Correlation Coefficient

Quant  Netcompany Group

Modest diversification

The 3 months correlation between Quant and Netcompany is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Quant and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group and Quant 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 Quant are associated (or correlated) with Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of Quant i.e., Quant and Netcompany Group go up and down completely randomly.

Pair Corralation between Quant and Netcompany Group

Assuming the 90 days trading horizon Quant is expected to under-perform the Netcompany Group. In addition to that, Quant is 2.3 times more volatile than Netcompany Group AS. It trades about -0.22 of its total potential returns per unit of risk. Netcompany Group AS is currently generating about -0.15 per unit of volatility. If you would invest  28,030  in Netcompany Group AS on January 26, 2024 and sell it today you would lose (1,610) from holding Netcompany Group AS or give up 5.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.36%
Values	Daily Returns

Quant  vs.  Netcompany Group AS

Quant

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quant are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Quant is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Netcompany Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Netcompany Group AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Netcompany Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Quant and Netcompany Group

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

The idea behind Quant and Netcompany Group AS 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.