Correlation Between Qtum and IOTA
Can any of the company-specific risk be diversified away by investing in both Qtum and IOTA 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 IOTA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qtum and IOTA, you can compare the effects of market volatilities on Qtum and IOTA 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 IOTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qtum and IOTA.
Diversification Opportunities for Qtum and IOTA
Very poor diversification
The 3 months correlation between Qtum and IOTA is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and IOTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOTA 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 IOTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOTA has no effect on the direction of Qtum i.e., Qtum and IOTA go up and down completely randomly.
Pair Corralation between Qtum and IOTA
Assuming the 90 days trading horizon Qtum is expected to generate 0.92 times more return on investment than IOTA. However, Qtum is 1.08 times less risky than IOTA. It trades about 0.11 of its potential returns per unit of risk. IOTA is currently generating about 0.04 per unit of risk. If you would invest 297.00 in Qtum on January 20, 2024 and sell it today you would earn a total of 103.00 from holding Qtum or generate 34.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qtum vs. IOTA
Performance |
Timeline |
Qtum |
IOTA |
Qtum and IOTA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qtum and IOTA
The main advantage of trading using opposite Qtum and IOTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qtum position performs unexpectedly, IOTA 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 IOTA will offset losses from the drop in IOTA's long position.The idea behind Qtum and IOTA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |