Correlation Between Quantumscape Corp and Arcimoto

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

By analyzing existing cross correlation between Quantumscape Corp and Arcimoto, you can compare the effects of market volatilities on Quantumscape Corp and Arcimoto 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 Quantumscape Corp with a short position of Arcimoto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantumscape Corp and Arcimoto.

Diversification Opportunities for Quantumscape Corp and Arcimoto

0.84

Correlation Coefficient

Quantumscape Corp  Arcimoto

Very poor diversification

The 3 months correlation between Quantumscape and Arcimoto is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Quantumscape Corp and Arcimoto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcimoto and Quantumscape Corp 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 Quantumscape Corp are associated (or correlated) with Arcimoto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcimoto has no effect on the direction of Quantumscape Corp i.e., Quantumscape Corp and Arcimoto go up and down completely randomly.

Pair Corralation between Quantumscape Corp and Arcimoto

Allowing for the 90-day total investment horizon Quantumscape Corp is expected to generate 1.12 times more return on investment than Arcimoto. However, Quantumscape Corp is 1.12 times more volatile than Arcimoto. It trades about -0.08 of its potential returns per unit of risk. Arcimoto is currently generating about -0.29 per unit of risk. If you would invest  614.00  in Quantumscape Corp on February 2, 2024 and sell it today you would lose (73.00) from holding Quantumscape Corp or give up 11.89% of portfolio value over 90 days.

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

Quantumscape Corp  vs.  Arcimoto

Quantumscape Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantumscape Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Arcimoto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcimoto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Quantumscape Corp and Arcimoto

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

The idea behind Quantumscape Corp and Arcimoto 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.