Correlation Between Quant and Dai

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

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

Diversification Opportunities for Quant and Dai

0.0

Correlation Coefficient

Quant  Dai

Pay attention - limited upside

The 3 months correlation between Quant and Dai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quant and Dai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dai and Quant 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 Quant are associated (or correlated) with Dai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dai has no effect on the direction of Quant i.e., Quant and Dai go up and down completely randomly.

Pair Corralation between Quant and Dai

If you would invest  100.00  in Dai on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Dai or generate 0.0% return on investment over 90 days.

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

Quant  vs.  Dai

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.

Dai

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Quant and Dai

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

The idea behind Quant and Dai 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.