Correlation Between Arqit Quantum and OneSpan

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

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

Diversification Opportunities for Arqit Quantum and OneSpan

0.69

Correlation Coefficient

Arqit Quantum  OneSpan

Poor diversification

The 3 months correlation between Arqit and OneSpan is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and OneSpan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpan 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 OneSpan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpan has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and OneSpan go up and down completely randomly.

Pair Corralation between Arqit Quantum and OneSpan

Given the investment horizon of 90 days Arqit Quantum is expected to generate 4.71 times more return on investment than OneSpan. However, Arqit Quantum is 4.71 times more volatile than OneSpan. It trades about 0.21 of its potential returns per unit of risk. OneSpan is currently generating about 0.13 per unit of risk. If you would invest  750.00  in Arqit Quantum on September 5, 2024 and sell it today you would earn a total of  1,946  from holding Arqit Quantum or generate 259.47% return on investment over 90 days.

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

Arqit Quantum  vs.  OneSpan

Arqit Quantum

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum are ranked lower than 16 (%) 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.

OneSpan

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpan are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, OneSpan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arqit Quantum and OneSpan

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

The idea behind Arqit Quantum and OneSpan 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.