Correlation Between Quantum and Integrated Media

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

By analyzing existing cross correlation between Quantum and Integrated Media Technology, you can compare the effects of market volatilities on Quantum and Integrated Media 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 Integrated Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantum and Integrated Media.

Diversification Opportunities for Quantum and Integrated Media

-0.05

Correlation Coefficient

Quantum  Integrated Media

Good diversification

The 3 months correlation between Quantum and Integrated is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec 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 Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Quantum i.e., Quantum and Integrated Media go up and down completely randomly.

Pair Corralation between Quantum and Integrated Media

Given the investment horizon of 90 days Quantum is expected to generate 3.74 times more return on investment than Integrated Media. However, Quantum is 3.74 times more volatile than Integrated Media Technology. It trades about 0.18 of its potential returns per unit of risk. Integrated Media Technology is currently generating about 0.01 per unit of risk. If you would invest  355.00  in Quantum on September 14, 2024 and sell it today you would earn a total of  1,362  from holding Quantum or generate 383.66% return on investment over 90 days.

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

Quantum  vs.  Integrated Media Technology

Quantum

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 14 (%) 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.

Integrated Media Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Integrated Media is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Quantum and Integrated Media

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

The idea behind Quantum and Integrated Media Technology 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.