Correlation Between Kruk SA and Quantum Software

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

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

Diversification Opportunities for Kruk SA and Quantum Software

0.05

Correlation Coefficient

Kruk SA  Quantum Software

Significant diversification

The 3 months correlation between Kruk and Quantum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kruk SA and Quantum Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Software and Kruk SA 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 Kruk SA are associated (or correlated) with Quantum Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Software has no effect on the direction of Kruk SA i.e., Kruk SA and Quantum Software go up and down completely randomly.

Pair Corralation between Kruk SA and Quantum Software

Assuming the 90 days trading horizon Kruk SA is expected to generate 0.21 times more return on investment than Quantum Software. However, Kruk SA is 4.74 times less risky than Quantum Software. It trades about 0.09 of its potential returns per unit of risk. Quantum Software SA is currently generating about -0.1 per unit of risk. If you would invest  42,580  in Kruk SA on September 15, 2024 and sell it today you would earn a total of  880.00  from holding Kruk SA or generate 2.07% return on investment over 90 days.

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

Kruk SA  vs.  Quantum Software SA

Kruk SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kruk SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kruk SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Quantum Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantum Software SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Quantum Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kruk SA and Quantum Software

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

The idea behind Kruk SA and Quantum Software SA 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.