Correlation Between Quantum and Foxx Development

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

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

Diversification Opportunities for Quantum and Foxx Development

-0.49

Correlation Coefficient

Quantum  Foxx Development

Very good diversification

The 3 months correlation between Quantum and Foxx is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Foxx Development Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foxx Development Holdings and Quantum 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 Quantum are associated (or correlated) with Foxx Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foxx Development Holdings has no effect on the direction of Quantum i.e., Quantum and Foxx Development go up and down completely randomly.

Pair Corralation between Quantum and Foxx Development

Given the investment horizon of 90 days Quantum is expected to under-perform the Foxx Development. In addition to that, Quantum is 2.03 times more volatile than Foxx Development Holdings. It trades about -0.14 of its total potential returns per unit of risk. Foxx Development Holdings is currently generating about -0.18 per unit of volatility. If you would invest  511.00  in Foxx Development Holdings on October 26, 2024 and sell it today you would lose (151.00) from holding Foxx Development Holdings or give up 29.55% of portfolio value over 90 days.

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

Quantum  vs.  Foxx Development Holdings

Quantum

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 16 (%) 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 Holdings

Risk-Adjusted Performance

0 of 100

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 weak 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.

Pair Trading with Quantum and Foxx Development

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

The idea behind Quantum and Foxx Development Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.