Correlation Between Qtum and Zilliqa

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

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

Diversification Opportunities for Qtum and Zilliqa

0.95

Correlation Coefficient

Qtum  Zilliqa

Almost no diversification

The 3 months correlation between Qtum and Zilliqa is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and Zilliqa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zilliqa 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 Zilliqa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zilliqa has no effect on the direction of Qtum i.e., Qtum and Zilliqa go up and down completely randomly.

Pair Corralation between Qtum and Zilliqa

Assuming the 90 days trading horizon Qtum is expected to generate 1.07 times more return on investment than Zilliqa. However, Qtum is 1.07 times more volatile than Zilliqa. It trades about 0.0 of its potential returns per unit of risk. Zilliqa is currently generating about -0.18 per unit of risk. If you would invest  425.00  in Qtum on January 20, 2024 and sell it today you would lose (25.00) from holding Qtum or give up 5.88% 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.  Zilliqa

Qtum

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qtum are ranked lower than 8 (%) 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.

Zilliqa

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zilliqa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Zilliqa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qtum and Zilliqa

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

The idea behind Qtum and Zilliqa 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.