Correlation Between Arqit Quantum and Box

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

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

Diversification Opportunities for Arqit Quantum and Box

0.36

Correlation Coefficient

Arqit Quantum  Box

Weak diversification

The 3 months correlation between Arqit and Box is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and Box Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Box Inc and Arqit Quantum 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 Arqit Quantum are associated (or correlated) with Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Box Inc has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and Box go up and down completely randomly.

Pair Corralation between Arqit Quantum and Box

Given the investment horizon of 90 days Arqit Quantum is expected to generate 8.82 times more return on investment than Box. However, Arqit Quantum is 8.82 times more volatile than Box Inc. It trades about 0.2 of its potential returns per unit of risk. Box Inc is currently generating about -0.02 per unit of risk. If you would invest  730.00  in Arqit Quantum on September 13, 2024 and sell it today you would earn a total of  1,664  from holding Arqit Quantum or generate 227.95% return on investment over 90 days.

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

Arqit Quantum  vs.  Box Inc

Arqit Quantum

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Arqit Quantum reported solid returns over the last few months and may actually be approaching a breakup point.

Box Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Box Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Box is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Arqit Quantum and Box

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

The idea behind Arqit Quantum and Box Inc 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.