Correlation Between EOS and Quant

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

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

Diversification Opportunities for EOS and Quant

0.91

Correlation Coefficient

EOS  Quant

Almost no diversification

The 3 months correlation between EOS and Quant is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EOS and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant and EOS 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 EOS are associated (or correlated) with Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quant has no effect on the direction of EOS i.e., EOS and Quant go up and down completely randomly.

Pair Corralation between EOS and Quant

Assuming the 90 days trading horizon EOS is expected to generate 1.15 times more return on investment than Quant. However, EOS is 1.15 times more volatile than Quant. It trades about -0.06 of its potential returns per unit of risk. Quant is currently generating about -0.11 per unit of risk. If you would invest  77.00  in EOS on December 29, 2024 and sell it today you would lose (20.00) from holding EOS or give up 25.97% of portfolio value over 90 days.

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

EOS  vs.  Quant

EOS

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for EOS shareholders.

Quant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Quant shareholders.

Pair Trading with EOS and Quant

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

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