Correlation Between QUALCOMM Incorporated and Distribuidora

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

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

Diversification Opportunities for QUALCOMM Incorporated and Distribuidora

0.36

Correlation Coefficient

QUALCOMM Incorporated  Distribuidora

Weak diversification

The 3 months correlation between QUALCOMM and Distribuidora is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding QUALCOMM Incorporated and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas and QUALCOMM Incorporated 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 QUALCOMM Incorporated are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of QUALCOMM Incorporated i.e., QUALCOMM Incorporated and Distribuidora go up and down completely randomly.

Pair Corralation between QUALCOMM Incorporated and Distribuidora

Assuming the 90 days trading horizon QUALCOMM Incorporated is expected to generate 1.19 times less return on investment than Distribuidora. But when comparing it to its historical volatility, QUALCOMM Incorporated is 1.92 times less risky than Distribuidora. It trades about 0.1 of its potential returns per unit of risk. Distribuidora de Gas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  129,000  in Distribuidora de Gas on April 23, 2025 and sell it today you would earn a total of  12,000  from holding Distribuidora de Gas or generate 9.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

QUALCOMM Incorporated  vs.  Distribuidora de Gas

QUALCOMM Incorporated

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QUALCOMM Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, QUALCOMM Incorporated may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Distribuidora de Gas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Distribuidora de Gas are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Distribuidora sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QUALCOMM Incorporated and Distribuidora

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

The idea behind QUALCOMM Incorporated and Distribuidora de Gas 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.