Correlation Between 0x and Quant

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Can any of the company-specific risk be diversified away by investing in both 0x 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 0x and Quant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and Quant, you can compare the effects of market volatilities on 0x 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 0x with a short position of Quant. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and Quant.

Diversification Opportunities for 0x and Quant

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 0x and Quant is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding 0x and Quant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quant and 0x 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 0x 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 0x i.e., 0x and Quant go up and down completely randomly.

Pair Corralation between 0x and Quant

Assuming the 90 days trading horizon 0x is expected to generate 2.83 times more return on investment than Quant. However, 0x is 2.83 times more volatile than Quant. It trades about 0.35 of its potential returns per unit of risk. Quant is currently generating about 0.18 per unit of risk. If you would invest  37.00  in 0x on December 29, 2023 and sell it today you would earn a total of  70.00  from holding 0x or generate 189.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

0x  vs.  Quant

 Performance 
       Timeline  
0x 

Risk-Adjusted Performance

15 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in 0x are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, 0x exhibited solid returns over the last few months and may actually be approaching a breakup point.
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.

0x and Quant Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 0x and Quant

The main advantage of trading using opposite 0x and Quant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x 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 0x 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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