Correlation Between Qtum and BTM
Can any of the company-specific risk be diversified away by investing in both Qtum and BTM 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 Qtum and BTM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qtum and BTM, you can compare the effects of market volatilities on Qtum and BTM 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 Qtum with a short position of BTM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qtum and BTM.
Diversification Opportunities for Qtum and BTM
Very poor diversification
The 3 months correlation between Qtum and BTM is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and BTM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTM and Qtum 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 Qtum are associated (or correlated) with BTM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTM has no effect on the direction of Qtum i.e., Qtum and BTM go up and down completely randomly.
Pair Corralation between Qtum and BTM
Assuming the 90 days trading horizon Qtum is expected to generate 1.04 times more return on investment than BTM. However, Qtum is 1.04 times more volatile than BTM. It trades about 0.12 of its potential returns per unit of risk. BTM is currently generating about 0.11 per unit of risk. If you would invest 293.00 in Qtum on January 26, 2024 and sell it today you would earn a total of 110.00 from holding Qtum or generate 37.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qtum vs. BTM
Performance |
| Timeline |
| Qtum |
| BTM |
Qtum and BTM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qtum and BTM
The main advantage of trading using opposite Qtum and BTM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qtum position performs unexpectedly, BTM 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 BTM will offset losses from the drop in BTM's long position.The idea behind Qtum and BTM 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.Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets |