Correlation Between Qtum and Maker

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

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

Diversification Opportunities for Qtum and Maker

0.61

Correlation Coefficient

Qtum  Maker

Poor diversification

The 3 months correlation between Qtum and Maker is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and Maker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maker and Qtum 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 Qtum are associated (or correlated) with Maker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maker has no effect on the direction of Qtum i.e., Qtum and Maker go up and down completely randomly.

Pair Corralation between Qtum and Maker

Assuming the 90 days trading horizon Qtum is expected to generate 2.42 times less return on investment than Maker. In addition to that, Qtum is 1.01 times more volatile than Maker. It trades about 0.06 of its total potential returns per unit of risk. Maker is currently generating about 0.14 per unit of volatility. If you would invest  69,999  in Maker on January 25, 2024 and sell it today you would earn a total of  211,965  from holding Maker or generate 302.81% return on investment over 90 days.

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

Qtum  vs.  Maker

Qtum

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qtum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Qtum exhibited solid returns over the last few months and may actually be approaching a breakup point.

Maker

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Qtum and Maker

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

The idea behind Qtum and Maker 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.