Correlation Between Foxx Development and Quantum

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Can any of the company-specific risk be diversified away by investing in both Foxx Development and Quantum 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 Foxx Development and Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foxx Development Holdings and Quantum, you can compare the effects of market volatilities on Foxx Development and Quantum 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 Foxx Development with a short position of Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foxx Development and Quantum.

Diversification Opportunities for Foxx Development and Quantum

-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Foxx and Quantum is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Foxx Development Holdings and Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum and Foxx Development 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 Foxx Development Holdings are associated (or correlated) with Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum has no effect on the direction of Foxx Development i.e., Foxx Development and Quantum go up and down completely randomly.

Pair Corralation between Foxx Development and Quantum

Given the investment horizon of 90 days Foxx Development is expected to generate 285.54 times less return on investment than Quantum. But when comparing it to its historical volatility, Foxx Development Holdings is 3.95 times less risky than Quantum. It trades about 0.0 of its potential returns per unit of risk. Quantum is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,021  in Quantum on October 11, 2024 and sell it today you would earn a total of  1,122  from holding Quantum or generate 55.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Foxx Development Holdings  vs.  Quantum

 Performance 
       Timeline  
Foxx Development Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Foxx Development Holdings 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 Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Quantum 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Foxx Development and Quantum Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Foxx Development and Quantum

The main advantage of trading using opposite Foxx Development and Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foxx Development position performs unexpectedly, Quantum 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 will offset losses from the drop in Quantum's long position.
The idea behind Foxx Development Holdings and Quantum 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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