Correlation Between Pulse Seismic and Quarterhill

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

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

Diversification Opportunities for Pulse Seismic and Quarterhill

-0.38

Correlation Coefficient

Pulse Seismic  Quarterhill

Very good diversification

The 3 months correlation between Pulse and Quarterhill is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pulse Seismic and Quarterhill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quarterhill and Pulse Seismic 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 Pulse Seismic are associated (or correlated) with Quarterhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quarterhill has no effect on the direction of Pulse Seismic i.e., Pulse Seismic and Quarterhill go up and down completely randomly.

Pair Corralation between Pulse Seismic and Quarterhill

Assuming the 90 days trading horizon Pulse Seismic is expected to generate 1.19 times more return on investment than Quarterhill. However, Pulse Seismic is 1.19 times more volatile than Quarterhill. It trades about 0.21 of its potential returns per unit of risk. Quarterhill is currently generating about -0.01 per unit of risk. If you would invest  248.00  in Pulse Seismic on April 24, 2025 and sell it today you would earn a total of  95.00  from holding Pulse Seismic or generate 38.31% return on investment over 90 days.

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

Pulse Seismic  vs.  Quarterhill

Pulse Seismic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pulse Seismic are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Pulse Seismic displayed solid returns over the last few months and may actually be approaching a breakup point.

Quarterhill

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quarterhill has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Quarterhill is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pulse Seismic and Quarterhill

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

The idea behind Pulse Seismic and Quarterhill 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.