Correlation Between Quant and Decred

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

Diversification Opportunities for Quant and Decred

0.67
  Correlation Coefficient

Poor diversification

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

Pair Corralation between Quant and Decred

Assuming the 90 days trading horizon Quant is expected to generate 1.18 times less return on investment than Decred. But when comparing it to its historical volatility, Quant is 1.02 times less risky than Decred. It trades about 0.18 of its potential returns per unit of risk. Decred is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,119  in Decred on December 29, 2023 and sell it today you would earn a total of  599.00  from holding Decred or generate 28.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Quant  vs.  Decred

 Performance 
       Timeline  
Quant 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 rather sound basic indicators, Quant is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Decred 

Risk-Adjusted Performance

9 of 100

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

Quant and Decred Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quant and Decred

The main advantage of trading using opposite Quant and Decred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quant position performs unexpectedly, Decred 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 Decred will offset losses from the drop in Decred's long position.
The idea behind Quant and Decred 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
CEOs Directory
Screen CEOs from public companies around the world