Correlation Between Public Power and Quest Holdings

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

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

Diversification Opportunities for Public Power and Quest Holdings

0.76

Correlation Coefficient

Public Power  Quest Holdings

Poor diversification

The 3 months correlation between Public and Quest is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Public Power 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 Public Power 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 Public Power 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 Public Power i.e., Public Power and Quest Holdings go up and down completely randomly.

Pair Corralation between Public Power and Quest Holdings

Assuming the 90 days trading horizon Public Power is expected to generate 2.65 times less return on investment than Quest Holdings. But when comparing it to its historical volatility, Public Power is 1.23 times less risky than Quest Holdings. It trades about 0.12 of its potential returns per unit of risk. Quest Holdings SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  604.00  in Quest Holdings SA on April 23, 2025 and sell it today you would earn a total of  162.00  from holding Quest Holdings SA or generate 26.82% return on investment over 90 days.

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

Public Power  vs.  Quest Holdings SA

Public Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power 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 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Quest Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Power and Quest Holdings

The main advantage of trading using opposite Public Power and Quest Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Power 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 Public Power 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.