Correlation Between STRC Old and D Wave

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

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

Diversification Opportunities for STRC Old and D Wave

-0.77

Correlation Coefficient

STRC Old  D Wave

Pay attention - limited upside

The 3 months correlation between STRC and QBTS is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding STRC Old 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 STRC Old 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 STRC Old 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 STRC Old i.e., STRC Old and D Wave go up and down completely randomly.

Pair Corralation between STRC Old and D Wave

Given the investment horizon of 90 days STRC Old is expected to under-perform the D Wave. But the stock apears to be less risky and, when comparing its historical volatility, STRC Old is 1.45 times less risky than D Wave. The stock trades about -0.07 of its potential returns per unit of risk. The D Wave Quantum is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  236.00  in D Wave Quantum on September 2, 2024 and sell it today you would earn a total of  66.00  from holding D Wave Quantum or generate 27.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	31.05%
Values	Daily Returns

STRC Old  vs.  D Wave Quantum

STRC Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

D Wave Quantum

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in D Wave Quantum are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, D Wave unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with STRC Old and D Wave

The main advantage of trading using opposite STRC Old and D Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRC Old 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 STRC Old 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..