Correlation Between Quest Diagnostics and NexGel Warrant

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

By analyzing existing cross correlation between Quest Diagnostics Incorporated and NexGel Warrant, you can compare the effects of market volatilities on Quest Diagnostics and NexGel Warrant 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 Quest Diagnostics with a short position of NexGel Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quest Diagnostics and NexGel Warrant.

Diversification Opportunities for Quest Diagnostics and NexGel Warrant

-0.51

Correlation Coefficient

Quest Diagnostics  NexGel Warrant

Excellent diversification

The 3 months correlation between Quest and NexGel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Quest Diagnostics Incorporated and NexGel Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGel Warrant and Quest Diagnostics 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 Quest Diagnostics Incorporated are associated (or correlated) with NexGel Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexGel Warrant has no effect on the direction of Quest Diagnostics i.e., Quest Diagnostics and NexGel Warrant go up and down completely randomly.

Pair Corralation between Quest Diagnostics and NexGel Warrant

Considering the 90-day investment horizon Quest Diagnostics is expected to generate 81.16 times less return on investment than NexGel Warrant. But when comparing it to its historical volatility, Quest Diagnostics Incorporated is 62.87 times less risky than NexGel Warrant. It trades about 0.07 of its potential returns per unit of risk. NexGel Warrant is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  37.00  in NexGel Warrant on March 6, 2025 and sell it today you would lose (9.00) from holding NexGel Warrant or give up 24.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	75.58%
Values	Daily Returns

Quest Diagnostics Incorporated  vs.  NexGel Warrant

Quest Diagnostics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quest Diagnostics Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Quest Diagnostics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NexGel Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days NexGel Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in July 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Quest Diagnostics and NexGel Warrant

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

The idea behind Quest Diagnostics Incorporated and NexGel Warrant 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.