Correlation Between Q Linea and Rolling Optics

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

By analyzing existing cross correlation between Q linea AB and Rolling Optics Holding, you can compare the effects of market volatilities on Q Linea and Rolling Optics 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 Q Linea with a short position of Rolling Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q Linea and Rolling Optics.

Diversification Opportunities for Q Linea and Rolling Optics

0.83

Correlation Coefficient

Q Linea  Rolling Optics

Very poor diversification

The 3 months correlation between QLINEA and Rolling is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Q linea AB and Rolling Optics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rolling Optics Holding and Q Linea 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 Q linea AB are associated (or correlated) with Rolling Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rolling Optics Holding has no effect on the direction of Q Linea i.e., Q Linea and Rolling Optics go up and down completely randomly.

Pair Corralation between Q Linea and Rolling Optics

Assuming the 90 days trading horizon Q Linea is expected to generate 2.18 times less return on investment than Rolling Optics. But when comparing it to its historical volatility, Q linea AB is 1.78 times less risky than Rolling Optics. It trades about 0.15 of its potential returns per unit of risk. Rolling Optics Holding is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Rolling Optics Holding on April 23, 2025 and sell it today you would earn a total of  65.00  from holding Rolling Optics Holding or generate 127.45% return on investment over 90 days.

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

Q linea AB  vs.  Rolling Optics Holding

Q linea AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Q linea AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Q Linea sustained solid returns over the last few months and may actually be approaching a breakup point.

Rolling Optics Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rolling Optics Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Rolling Optics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Q Linea and Rolling Optics

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

The idea behind Q linea AB and Rolling Optics Holding 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.