Correlation Between Quantified Market and Spectrum Advisors

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

By analyzing existing cross correlation between Quantified Market Leaders and Spectrum Advisors Preferred, you can compare the effects of market volatilities on Quantified Market and Spectrum Advisors 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 Quantified Market with a short position of Spectrum Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantified Market and Spectrum Advisors.

Diversification Opportunities for Quantified Market and Spectrum Advisors

0.96

Correlation Coefficient

Quantified Market  Spectrum Advisors

Almost no diversification

The 3 months correlation between Quantified and Spectrum is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Market Leaders and Spectrum Advisors Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Advisors and Quantified Market 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 Quantified Market Leaders are associated (or correlated) with Spectrum Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Advisors has no effect on the direction of Quantified Market i.e., Quantified Market and Spectrum Advisors go up and down completely randomly.

Pair Corralation between Quantified Market and Spectrum Advisors

Assuming the 90 days horizon Quantified Market Leaders is expected to generate 2.22 times more return on investment than Spectrum Advisors. However, Quantified Market is 2.22 times more volatile than Spectrum Advisors Preferred. It trades about 0.28 of its potential returns per unit of risk. Spectrum Advisors Preferred is currently generating about 0.22 per unit of risk. If you would invest  889.00  in Quantified Market Leaders on April 29, 2025 and sell it today you would earn a total of  172.00  from holding Quantified Market Leaders or generate 19.35% return on investment over 90 days.

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

Quantified Market Leaders  vs.  Spectrum Advisors Preferred

Quantified Market Leaders

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantified Market Leaders are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Quantified Market showed solid returns over the last few months and may actually be approaching a breakup point.

Spectrum Advisors

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Advisors Preferred are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Spectrum Advisors may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Quantified Market and Spectrum Advisors

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

The idea behind Quantified Market Leaders and Spectrum Advisors Preferred 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.