Correlation Between Arqit Quantum and Cellebrite

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

By analyzing existing cross correlation between Arqit Quantum Warrants and Cellebrite DI Equity, you can compare the effects of market volatilities on Arqit Quantum and Cellebrite 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 Arqit Quantum with a short position of Cellebrite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arqit Quantum and Cellebrite.

Diversification Opportunities for Arqit Quantum and Cellebrite

0.03

Correlation Coefficient

Arqit Quantum  Cellebrite

Significant diversification

The 3 months correlation between Arqit and Cellebrite is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum Warrants and Cellebrite DI Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellebrite DI Equity and Arqit Quantum 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 Arqit Quantum Warrants are associated (or correlated) with Cellebrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellebrite DI Equity has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and Cellebrite go up and down completely randomly.

Pair Corralation between Arqit Quantum and Cellebrite

Assuming the 90 days horizon Arqit Quantum Warrants is expected to generate 11.78 times more return on investment than Cellebrite. However, Arqit Quantum is 11.78 times more volatile than Cellebrite DI Equity. It trades about 0.14 of its potential returns per unit of risk. Cellebrite DI Equity is currently generating about -0.21 per unit of risk. If you would invest  37.00  in Arqit Quantum Warrants on September 5, 2024 and sell it today you would earn a total of  11.00  from holding Arqit Quantum Warrants or generate 29.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	14.06%
Values	Daily Returns

Arqit Quantum Warrants  vs.  Cellebrite DI Equity

Arqit Quantum Warrants

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum Warrants are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Arqit Quantum showed solid returns over the last few months and may actually be approaching a breakup point.

Cellebrite DI Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellebrite DI Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Arqit Quantum and Cellebrite

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

The idea behind Arqit Quantum Warrants and Cellebrite DI Equity 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.