Correlation Between Quanta Storage and Quanta Computer

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

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

Diversification Opportunities for Quanta Storage and Quanta Computer

0.48

Correlation Coefficient

Quanta Storage  Quanta Computer

Very weak diversification

The 3 months correlation between Quanta and Quanta is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Quanta Storage and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer 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 Quanta Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Computer has no effect on the direction of Quanta Storage i.e., Quanta Storage and Quanta Computer go up and down completely randomly.

Pair Corralation between Quanta Storage and Quanta Computer

Assuming the 90 days trading horizon Quanta Storage is expected to generate 1.14 times more return on investment than Quanta Computer. However, Quanta Storage is 1.14 times more volatile than Quanta Computer. It trades about -0.05 of its potential returns per unit of risk. Quanta Computer is currently generating about -0.13 per unit of risk. If you would invest  10,400  in Quanta Storage on December 28, 2024 and sell it today you would lose (900.00) from holding Quanta Storage or give up 8.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.21%
Values	Daily Returns

Quanta Storage  vs.  Quanta Computer

Quanta Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quanta Storage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Quanta Computer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quanta Computer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Quanta Storage and Quanta Computer

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

The idea behind Quanta Storage and Quanta Computer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.