Correlation Between Applovin Corp and Quantgate Systems

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

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

Diversification Opportunities for Applovin Corp and Quantgate Systems

0.74

Correlation Coefficient

Applovin Corp  Quantgate Systems

Poor diversification

The 3 months correlation between Applovin and Quantgate is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Applovin Corp and Quantgate Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantgate Systems and Applovin Corp 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 Applovin Corp are associated (or correlated) with Quantgate Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantgate Systems has no effect on the direction of Applovin Corp i.e., Applovin Corp and Quantgate Systems go up and down completely randomly.

Pair Corralation between Applovin Corp and Quantgate Systems

Considering the 90-day investment horizon Applovin Corp is expected to generate 2.64 times less return on investment than Quantgate Systems. But when comparing it to its historical volatility, Applovin Corp is 3.23 times less risky than Quantgate Systems. It trades about 0.25 of its potential returns per unit of risk. Quantgate Systems is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.76  in Quantgate Systems on September 17, 2024 and sell it today you would earn a total of  2.24  from holding Quantgate Systems or generate 294.74% return on investment over 90 days.

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

Applovin Corp  vs.  Quantgate Systems

Applovin Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Quantgate Systems

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantgate Systems are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Quantgate Systems demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applovin Corp and Quantgate Systems

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

The idea behind Applovin Corp and Quantgate Systems 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.