Correlation Between Elton International and Quest Holdings

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

By analyzing existing cross correlation between Elton International Trading and Quest Holdings SA, you can compare the effects of market volatilities on Elton International and Quest Holdings 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 Elton International with a short position of Quest Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and Quest Holdings.

Diversification Opportunities for Elton International and Quest Holdings

0.48

Correlation Coefficient

Elton International  Quest Holdings

Very weak diversification

The 3 months correlation between Elton and Quest is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Elton International Trading and Quest Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quest Holdings SA and Elton International 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 Elton International Trading are associated (or correlated) with Quest Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quest Holdings SA has no effect on the direction of Elton International i.e., Elton International and Quest Holdings go up and down completely randomly.

Pair Corralation between Elton International and Quest Holdings

Assuming the 90 days trading horizon Elton International is expected to generate 2.45 times less return on investment than Quest Holdings. But when comparing it to its historical volatility, Elton International Trading is 1.07 times less risky than Quest Holdings. It trades about 0.1 of its potential returns per unit of risk. Quest Holdings SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  605.00  in Quest Holdings SA on April 24, 2025 and sell it today you would earn a total of  150.00  from holding Quest Holdings SA or generate 24.79% return on investment over 90 days.

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

Elton International Trading  vs.  Quest Holdings SA

Elton International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elton International Trading are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elton International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Quest Holdings SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quest Holdings SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Quest Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elton International and Quest Holdings

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

The idea behind Elton International Trading and Quest Holdings SA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.