Correlation Between Qtum and ZEN
Can any of the company-specific risk be diversified away by investing in both Qtum and ZEN 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 ZEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qtum and ZEN, you can compare the effects of market volatilities on Qtum and ZEN 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 ZEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qtum and ZEN.
Diversification Opportunities for Qtum and ZEN
Poor diversification
The 3 months correlation between Qtum and ZEN is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and ZEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZEN 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 ZEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZEN has no effect on the direction of Qtum i.e., Qtum and ZEN go up and down completely randomly.
Pair Corralation between Qtum and ZEN
Assuming the 90 days trading horizon Qtum is expected to generate 1.05 times more return on investment than ZEN. However, Qtum is 1.05 times more volatile than ZEN. It trades about -0.1 of its potential returns per unit of risk. ZEN is currently generating about -0.27 per unit of risk. If you would invest 482.00 in Qtum on January 27, 2024 and sell it today you would lose (87.00) from holding Qtum or give up 18.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Qtum vs. ZEN
Performance |
Timeline |
Qtum |
ZEN |
Qtum and ZEN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qtum and ZEN
The main advantage of trading using opposite Qtum and ZEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qtum position performs unexpectedly, ZEN 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 ZEN will offset losses from the drop in ZEN's long position.The idea behind Qtum and ZEN 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Stocks Directory Find actively traded stocks across global markets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |