Correlation Between Quantum and D Wave

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

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

Diversification Opportunities for Quantum and D Wave

0.37

Correlation Coefficient

Quantum  D Wave

Weak diversification

The 3 months correlation between Quantum and QBTS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and D Wave Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Wave Quantum 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 D Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Wave Quantum has no effect on the direction of Quantum i.e., Quantum and D Wave go up and down completely randomly.

Pair Corralation between Quantum and D Wave

Given the investment horizon of 90 days Quantum is expected to under-perform the D Wave. In addition to that, Quantum is 1.08 times more volatile than D Wave Quantum. It trades about -0.12 of its total potential returns per unit of risk. D Wave Quantum is currently generating about 0.04 per unit of volatility. If you would invest  930.00  in D Wave Quantum on December 28, 2024 and sell it today you would lose (172.00) from holding D Wave Quantum or give up 18.49% of portfolio value over 90 days.

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

Quantum  vs.  D Wave Quantum

Quantum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

D Wave Quantum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in D Wave Quantum are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, D Wave unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quantum and D Wave

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

The idea behind Quantum and D Wave 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.