Correlation Between Ontology and Quant

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ontology and Quant 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 Ontology and Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontology and Quant, you can compare the effects of market volatilities on Ontology and Quant 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 Ontology with a short position of Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontology and Quant.

Diversification Opportunities for Ontology and Quant

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Ontology and Quant is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ontology and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant and Ontology 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 Ontology are associated (or correlated) with Quant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quant has no effect on the direction of Ontology i.e., Ontology and Quant go up and down completely randomly.

Pair Corralation between Ontology and Quant

Assuming the 90 days trading horizon Ontology is expected to generate 1.13 times more return on investment than Quant. However, Ontology is 1.13 times more volatile than Quant. It trades about 0.22 of its potential returns per unit of risk. Quant is currently generating about 0.17 per unit of risk. If you would invest  28.00  in Ontology on December 30, 2023 and sell it today you would earn a total of  9.00  from holding Ontology or generate 32.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Ontology  vs.  Quant

 Performance 
       Timeline  
Ontology 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ontology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ontology exhibited solid returns over the last few months and may actually be approaching a breakup point.
Quant 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Quant are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Quant exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ontology and Quant Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ontology and Quant

The main advantage of trading using opposite Ontology and Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontology position performs unexpectedly, Quant 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 Quant will offset losses from the drop in Quant's long position.
The idea behind Ontology and Quant 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Fundamental Analysis
View fundamental data based on most recent published financial statements
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing