Correlation Between Quantum and Frequency Electronics

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

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

Diversification Opportunities for Quantum and Frequency Electronics

-0.62

Correlation Coefficient

Quantum  Frequency Electronics

Excellent diversification

The 3 months correlation between Quantum and Frequency is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics and Quantum 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 Quantum are associated (or correlated) with Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of Quantum i.e., Quantum and Frequency Electronics go up and down completely randomly.

Pair Corralation between Quantum and Frequency Electronics

Given the investment horizon of 90 days Quantum is expected to under-perform the Frequency Electronics. In addition to that, Quantum is 1.41 times more volatile than Frequency Electronics. It trades about -0.06 of its total potential returns per unit of risk. Frequency Electronics is currently generating about 0.15 per unit of volatility. If you would invest  1,807  in Frequency Electronics on May 5, 2025 and sell it today you would earn a total of  838.00  from holding Frequency Electronics or generate 46.38% return on investment over 90 days.

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

Quantum  vs.  Frequency Electronics

Quantum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Frequency Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Frequency Electronics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Frequency Electronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quantum and Frequency Electronics

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

The idea behind Quantum and Frequency Electronics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.