Correlation Between Arqit Quantum and Nutanix

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

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

Diversification Opportunities for Arqit Quantum and Nutanix

-0.71

Correlation Coefficient

Arqit Quantum  Nutanix

Pay attention - limited upside

The 3 months correlation between Arqit and Nutanix is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix 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 Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and Nutanix go up and down completely randomly.

Pair Corralation between Arqit Quantum and Nutanix

Given the investment horizon of 90 days Arqit Quantum is expected to generate 5.78 times more return on investment than Nutanix. However, Arqit Quantum is 5.78 times more volatile than Nutanix. It trades about 0.01 of its potential returns per unit of risk. Nutanix is currently generating about 0.03 per unit of risk. If you would invest  1,998  in Arqit Quantum on November 28, 2024 and sell it today you would lose (660.00) from holding Arqit Quantum or give up 33.03% of portfolio value over 90 days.

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

Arqit Quantum  vs.  Nutanix

Arqit Quantum

Risk-Adjusted Performance

Weak

Over the last 90 days Arqit Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Arqit Quantum may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Nutanix

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Nutanix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Arqit Quantum and Nutanix

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

The idea behind Arqit Quantum and Nutanix 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.