Correlation Between Quanta Storage and Quintain Steel

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

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

Diversification Opportunities for Quanta Storage and Quintain Steel

0.14

Correlation Coefficient

Quanta Storage  Quintain Steel

Average diversification

The 3 months correlation between Quanta and Quintain is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Storage and Quintain Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quintain Steel and Quanta Storage 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 Quanta Storage are associated (or correlated) with Quintain Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quintain Steel has no effect on the direction of Quanta Storage i.e., Quanta Storage and Quintain Steel go up and down completely randomly.

Pair Corralation between Quanta Storage and Quintain Steel

Assuming the 90 days trading horizon Quanta Storage is expected to generate 2.27 times less return on investment than Quintain Steel. But when comparing it to its historical volatility, Quanta Storage is 1.18 times less risky than Quintain Steel. It trades about 0.12 of its potential returns per unit of risk. Quintain Steel Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,100  in Quintain Steel Co on December 4, 2024 and sell it today you would earn a total of  150.00  from holding Quintain Steel Co or generate 13.64% return on investment over 90 days.

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

Quanta Storage  vs.  Quintain Steel Co

Quanta Storage

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Quanta Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quanta Storage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Quintain Steel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quintain Steel Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quintain Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Quanta Storage and Quintain Steel

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

The idea behind Quanta Storage and Quintain Steel Co 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.