Correlation Between Analog Devices and Quantum EMotion

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

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

Diversification Opportunities for Analog Devices and Quantum EMotion

-0.11

Correlation Coefficient

Analog Devices  Quantum EMotion

Good diversification

The 3 months correlation between Analog and Quantum is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Quantum eMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum eMotion and Analog Devices 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 Analog Devices are associated (or correlated) with Quantum EMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum eMotion has no effect on the direction of Analog Devices i.e., Analog Devices and Quantum EMotion go up and down completely randomly.

Pair Corralation between Analog Devices and Quantum EMotion

Considering the 90-day investment horizon Analog Devices is expected to generate 16.82 times less return on investment than Quantum EMotion. But when comparing it to its historical volatility, Analog Devices is 6.68 times less risky than Quantum EMotion. It trades about 0.04 of its potential returns per unit of risk. Quantum eMotion is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Quantum eMotion on October 4, 2024 and sell it today you would earn a total of  117.00  from holding Quantum eMotion or generate 1671.43% return on investment over 90 days.

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

Analog Devices  vs.  Quantum eMotion

Analog Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Quantum eMotion

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum eMotion are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Quantum EMotion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and Quantum EMotion

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

The idea behind Analog Devices and Quantum eMotion 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.