Correlation Between QVC and Gates Industrial

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

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

Diversification Opportunities for QVC and Gates Industrial

-0.46

Correlation Coefficient

QVC  Gates Industrial

Very good diversification

The 3 months correlation between QVC and Gates is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding QVC Group and Gates Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gates Industrial and QVC 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 QVC Group are associated (or correlated) with Gates Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gates Industrial has no effect on the direction of QVC i.e., QVC and Gates Industrial go up and down completely randomly.

Pair Corralation between QVC and Gates Industrial

Assuming the 90 days horizon QVC Group is expected to under-perform the Gates Industrial. In addition to that, QVC is 7.76 times more volatile than Gates Industrial. It trades about -0.01 of its total potential returns per unit of risk. Gates Industrial is currently generating about 0.09 per unit of volatility. If you would invest  2,223  in Gates Industrial on May 14, 2025 and sell it today you would earn a total of  145.00  from holding Gates Industrial or generate 6.52% return on investment over 90 days.

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

QVC Group  vs.  Gates Industrial

QVC Group

Risk-Adjusted Performance

Weakest

Over the last 90 days QVC Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, QVC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gates Industrial

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Gates Industrial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Gates Industrial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with QVC and Gates Industrial

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

The idea behind QVC Group and Gates Industrial 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.