Correlation Between Clear Media and Quest Resource

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

By analyzing existing cross correlation between Clear Media Limited and Quest Resource Holding, you can compare the effects of market volatilities on Clear Media and Quest Resource 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 Clear Media with a short position of Quest Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Media and Quest Resource.

Diversification Opportunities for Clear Media and Quest Resource

0.0

Correlation Coefficient

Clear Media  Quest Resource

Pay attention - limited upside

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

Pair Corralation between Clear Media and Quest Resource

If you would invest  819.00  in Quest Resource Holding on February 2, 2024 and sell it today you would earn a total of  209.00  from holding Quest Resource Holding or generate 25.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Clear Media Limited  vs.  Quest Resource Holding

Clear Media Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Media Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Clear Media is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Quest Resource Holding

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quest Resource Holding are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical indicators, Quest Resource exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clear Media and Quest Resource

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

The idea behind Clear Media Limited and Quest Resource Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.