Correlation Between Quantum Genomics and Novacyt

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

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

Diversification Opportunities for Quantum Genomics and Novacyt

-0.75

Correlation Coefficient

Quantum Genomics  Novacyt

Pay attention - limited upside

The 3 months correlation between Quantum and Novacyt is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Quantum Genomics SA and Novacyt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novacyt and Quantum Genomics 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 Genomics SA are associated (or correlated) with Novacyt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novacyt has no effect on the direction of Quantum Genomics i.e., Quantum Genomics and Novacyt go up and down completely randomly.

Pair Corralation between Quantum Genomics and Novacyt

Assuming the 90 days trading horizon Quantum Genomics SA is expected to generate 5.27 times more return on investment than Novacyt. However, Quantum Genomics is 5.27 times more volatile than Novacyt. It trades about 0.18 of its potential returns per unit of risk. Novacyt is currently generating about -0.07 per unit of risk. If you would invest  1.06  in Quantum Genomics SA on September 12, 2024 and sell it today you would earn a total of  6.15  from holding Quantum Genomics SA or generate 580.19% return on investment over 90 days.

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

Quantum Genomics SA  vs.  Novacyt

Quantum Genomics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Genomics SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Quantum Genomics reported solid returns over the last few months and may actually be approaching a breakup point.

Novacyt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Novacyt has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Quantum Genomics and Novacyt

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

The idea behind Quantum Genomics SA and Novacyt 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.