Correlation Between HG High and QEM
Can any of the company-specific risk be diversified away by investing in both HG High and QEM 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 HG High and QEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HG High Conviction and QEM, you can compare the effects of market volatilities on HG High and QEM 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 HG High with a short position of QEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of HG High and QEM.
Diversification Opportunities for HG High and QEM
Very good diversification
The 3 months correlation between HCF and QEM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HG High Conviction and QEM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEM and HG High 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 HG High Conviction are associated (or correlated) with QEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEM has no effect on the direction of HG High i.e., HG High and QEM go up and down completely randomly.
Pair Corralation between HG High and QEM
Assuming the 90 days trading horizon HG High Conviction is expected to under-perform the QEM. In addition to that, HG High is 1.29 times more volatile than QEM. It trades about -0.09 of its total potential returns per unit of risk. QEM is currently generating about -0.05 per unit of volatility. If you would invest 18.00 in QEM on August 30, 2025 and sell it today you would lose (16.30) from holding QEM or give up 90.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.41% |
| Values | Daily Returns |
HG High Conviction vs. QEM
Performance |
| Timeline |
| HG High Conviction |
| QEM |
HG High and QEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HG High and QEM
The main advantage of trading using opposite HG High and QEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HG High position performs unexpectedly, QEM 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 QEM will offset losses from the drop in QEM's long position.| HG High vs. Autosports Group | HG High vs. Air New Zealand | HG High vs. Australian Agricultural | HG High vs. Truscott Mining |
| QEM vs. OohMedia | QEM vs. Maggie Beer Holdings | QEM vs. Australian Agricultural | QEM vs. Ai Media Technologies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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