Correlation Between Cloudflare and Qualys

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

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

Diversification Opportunities for Cloudflare and Qualys

0.25

Correlation Coefficient

Cloudflare  Qualys

Modest diversification

The 3 months correlation between Cloudflare and Qualys is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys Inc and Cloudflare 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 Cloudflare are associated (or correlated) with Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of Cloudflare i.e., Cloudflare and Qualys go up and down completely randomly.

Pair Corralation between Cloudflare and Qualys

Considering the 90-day investment horizon Cloudflare is expected to generate 1.34 times more return on investment than Qualys. However, Cloudflare is 1.34 times more volatile than Qualys Inc. It trades about 0.24 of its potential returns per unit of risk. Qualys Inc is currently generating about -0.05 per unit of risk. If you would invest  15,036  in Cloudflare on May 13, 2025 and sell it today you would earn a total of  5,424  from holding Cloudflare or generate 36.07% return on investment over 90 days.

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

Cloudflare  vs.  Qualys Inc

Cloudflare

Risk-Adjusted Performance

Solid

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

Qualys Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Qualys is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cloudflare and Qualys

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

The idea behind Cloudflare and Qualys Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.