Correlation Between DIA and Qtum

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

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

Diversification Opportunities for DIA and Qtum

0.69

Correlation Coefficient

DIA  Qtum

Poor diversification

The 3 months correlation between DIA and Qtum is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding DIA and Qtum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qtum and DIA 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 DIA are associated (or correlated) with Qtum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qtum has no effect on the direction of DIA i.e., DIA and Qtum go up and down completely randomly.

Pair Corralation between DIA and Qtum

Assuming the 90 days trading horizon DIA is expected to generate 1.62 times more return on investment than Qtum. However, DIA is 1.62 times more volatile than Qtum. It trades about 0.04 of its potential returns per unit of risk. Qtum is currently generating about 0.04 per unit of risk. If you would invest  42.00  in DIA on April 20, 2025 and sell it today you would earn a total of  2.00  from holding DIA or generate 4.76% return on investment over 90 days.

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

DIA  vs.  Qtum

DIA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DIA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Qtum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Qtum are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Qtum may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with DIA and Qtum

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

The idea behind DIA and Qtum 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.