Correlation Between Quantitative and Axs Thomson

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

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

Diversification Opportunities for Quantitative and Axs Thomson

0.47

Correlation Coefficient

Quantitative  Axs Thomson

Very weak diversification

The 3 months correlation between Quantitative and Axs is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Axs Thomson Reuters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axs Thomson Reuters and Quantitative 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 Quantitative Longshort Equity are associated (or correlated) with Axs Thomson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axs Thomson Reuters has no effect on the direction of Quantitative i.e., Quantitative and Axs Thomson go up and down completely randomly.

Pair Corralation between Quantitative and Axs Thomson

Assuming the 90 days horizon Quantitative Longshort Equity is expected to under-perform the Axs Thomson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Quantitative Longshort Equity is 1.44 times less risky than Axs Thomson. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Axs Thomson Reuters is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,383  in Axs Thomson Reuters on October 24, 2024 and sell it today you would earn a total of  230.00  from holding Axs Thomson Reuters or generate 9.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Quantitative Longshort Equity  vs.  Axs Thomson Reuters

Quantitative Longshort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantitative Longshort Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Quantitative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Axs Thomson Reuters

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axs Thomson Reuters are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Axs Thomson may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Quantitative and Axs Thomson

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

The idea behind Quantitative Longshort Equity and Axs Thomson Reuters 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.