Correlation Between Cemtrex and Quantum Computing

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

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

Diversification Opportunities for Cemtrex and Quantum Computing

-0.44

Correlation Coefficient

Cemtrex  Quantum Computing

Very good diversification

The 3 months correlation between Cemtrex and Quantum is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex and Quantum Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Computing and Cemtrex 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 Cemtrex are associated (or correlated) with Quantum Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Computing has no effect on the direction of Cemtrex i.e., Cemtrex and Quantum Computing go up and down completely randomly.

Pair Corralation between Cemtrex and Quantum Computing

Given the investment horizon of 90 days Cemtrex is expected to under-perform the Quantum Computing. But the stock apears to be less risky and, when comparing its historical volatility, Cemtrex is 1.35 times less risky than Quantum Computing. The stock trades about -0.43 of its potential returns per unit of risk. The Quantum Computing is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  69.00  in Quantum Computing on September 14, 2024 and sell it today you would earn a total of  567.00  from holding Quantum Computing or generate 821.74% return on investment over 90 days.

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

Cemtrex  vs.  Quantum Computing

Cemtrex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemtrex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Quantum Computing

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Computing are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Quantum Computing unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cemtrex and Quantum Computing

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

The idea behind Cemtrex and Quantum Computing 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 Transaction History module to view history of all your transactions and understand their impact on performance.