Correlation Between MacroWell OMG and Quanta Computer

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

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

Diversification Opportunities for MacroWell OMG and Quanta Computer

0.65

Correlation Coefficient

MacroWell OMG  Quanta Computer

Poor diversification

The 3 months correlation between MacroWell and Quanta is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MacroWell OMG Digital and Quanta Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Computer and MacroWell OMG 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 MacroWell OMG Digital are associated (or correlated) with Quanta Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Computer has no effect on the direction of MacroWell OMG i.e., MacroWell OMG and Quanta Computer go up and down completely randomly.

Pair Corralation between MacroWell OMG and Quanta Computer

Assuming the 90 days trading horizon MacroWell OMG is expected to generate 5.65 times less return on investment than Quanta Computer. In addition to that, MacroWell OMG is 1.41 times more volatile than Quanta Computer. It trades about 0.01 of its total potential returns per unit of risk. Quanta Computer is currently generating about 0.1 per unit of volatility. If you would invest  25,450  in Quanta Computer on September 13, 2024 and sell it today you would earn a total of  3,250  from holding Quanta Computer or generate 12.77% return on investment over 90 days.

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

MacroWell OMG Digital  vs.  Quanta Computer

MacroWell OMG Digital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MacroWell OMG Digital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, MacroWell OMG is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Quanta Computer

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quanta Computer are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quanta Computer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MacroWell OMG and Quanta Computer

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

The idea behind MacroWell OMG Digital and Quanta Computer 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.