Correlation Between Graph and Quant

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

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

Diversification Opportunities for Graph and Quant

0.93

Correlation Coefficient

Graph  Quant

Almost no diversification

The 3 months correlation between Graph and Quant is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Graph and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant and Graph 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 The Graph 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 Graph i.e., Graph and Quant go up and down completely randomly.

Pair Corralation between Graph and Quant

Assuming the 90 days trading horizon The Graph is expected to under-perform the Quant. In addition to that, Graph is 1.31 times more volatile than Quant. It trades about -0.17 of its total potential returns per unit of risk. Quant is currently generating about -0.12 per unit of volatility. If you would invest  10,629  in Quant on December 29, 2024 and sell it today you would lose (3,695) from holding Quant or give up 34.76% of portfolio value over 90 days.

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

The Graph  vs.  Quant

Graph

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Graph 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 The Graph 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 Graph and Quant

The main advantage of trading using opposite Graph and Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graph 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 The Graph 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.