Correlation Between Qualys and Analog Devices

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

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

Diversification Opportunities for Qualys and Analog Devices

0.83

Correlation Coefficient

Qualys  Analog Devices

Very poor diversification

The 3 months correlation between Qualys and Analog is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Qualys 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 Qualys Inc are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Qualys i.e., Qualys and Analog Devices go up and down completely randomly.

Pair Corralation between Qualys and Analog Devices

Given the investment horizon of 90 days Qualys is expected to generate 3.11 times less return on investment than Analog Devices. But when comparing it to its historical volatility, Qualys Inc is 1.09 times less risky than Analog Devices. It trades about 0.05 of its potential returns per unit of risk. Analog Devices is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  19,682  in Analog Devices on May 3, 2025 and sell it today you would earn a total of  2,781  from holding Analog Devices or generate 14.13% return on investment over 90 days.

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

Qualys Inc  vs.  Analog Devices

Qualys Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qualys Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Qualys is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Analog Devices

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qualys and Analog Devices

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

The idea behind Qualys Inc and Analog Devices 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.