Correlation Between Qtum and REP

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

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

Diversification Opportunities for Qtum and REP

0.91

Correlation Coefficient

Qtum  REP

Almost no diversification

The 3 months correlation between Qtum and REP is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and REP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REP 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 REP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REP has no effect on the direction of Qtum i.e., Qtum and REP go up and down completely randomly.

Pair Corralation between Qtum and REP

Assuming the 90 days trading horizon Qtum is expected to generate 1.01 times more return on investment than REP. However, Qtum is 1.01 times more volatile than REP. It trades about -0.04 of its potential returns per unit of risk. REP is currently generating about -0.12 per unit of risk. If you would invest  476.00  in Qtum on January 25, 2024 and sell it today you would lose (52.00) from holding Qtum or give up 10.92% of portfolio value over 90 days.

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

Qtum  vs.  REP

Qtum

Risk-Adjusted Performance

10 of 100

OK

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.

REP

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in REP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, REP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qtum and REP

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

The idea behind Qtum and REP 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.