Correlation Between Tezos and Qtum
Can any of the company-specific risk be diversified away by investing in both Tezos and Qtum 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 Tezos and Qtum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tezos and Qtum, you can compare the effects of market volatilities on Tezos and Qtum 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 Tezos with a short position of Qtum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tezos and Qtum.
Diversification Opportunities for Tezos and Qtum
Very poor diversification
The 3 months correlation between Tezos and Qtum is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tezos and Qtum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qtum and Tezos 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 Tezos are associated (or correlated) with Qtum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qtum has no effect on the direction of Tezos i.e., Tezos and Qtum go up and down completely randomly.
Pair Corralation between Tezos and Qtum
Assuming the 90 days trading horizon Tezos is expected to generate 2.59 times less return on investment than Qtum. But when comparing it to its historical volatility, Tezos is 1.14 times less risky than Qtum. It trades about 0.06 of its potential returns per unit of risk. Qtum is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Qtum on January 24, 2024 and sell it today you would earn a total of 144.00 from holding Qtum or generate 51.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tezos vs. Qtum
Performance |
| Timeline |
| Tezos |
| Qtum |
Tezos and Qtum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tezos and Qtum
The main advantage of trading using opposite Tezos and Qtum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tezos position performs unexpectedly, Qtum 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 Qtum will offset losses from the drop in Qtum's long position.The idea behind Tezos and Qtum 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |