Correlation Between 10X Capital and EQRx

Can any of the company-specific risk be diversified away by investing in both 10X Capital and EQRx 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 10X Capital and EQRx into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Capital Venture and EQRx Inc, you can compare the effects of market volatilities on 10X Capital and EQRx 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 10X Capital with a short position of EQRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Capital and EQRx.

Diversification Opportunities for 10X Capital and EQRx

0.08

Correlation Coefficient

10X Capital  EQRx

Significant diversification

The 3 months correlation between 10X and EQRx is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding 10X Capital Venture and EQRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQRx Inc and 10X Capital 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 10X Capital Venture are associated (or correlated) with EQRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQRx Inc has no effect on the direction of 10X Capital i.e., 10X Capital and EQRx go up and down completely randomly.

Pair Corralation between 10X Capital and EQRx

Assuming the 90 days horizon 10X Capital is expected to generate 98.88 times less return on investment than EQRx. But when comparing it to its historical volatility, 10X Capital Venture is 18.32 times less risky than EQRx. It trades about 0.04 of its potential returns per unit of risk. EQRx Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  11.00  in EQRx Inc on August 31, 2024 and sell it today you would earn a total of  8.00  from holding EQRx Inc or generate 72.73% return on investment over 90 days.

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

10X Capital Venture  vs.  EQRx Inc

10X Capital Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Capital Venture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, 10X Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EQRx Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EQRx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, EQRx is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with 10X Capital and EQRx

The main advantage of trading using opposite 10X Capital and EQRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Capital position performs unexpectedly, EQRx 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 EQRx will offset losses from the drop in EQRx's long position.

The idea behind 10X Capital Venture and EQRx Inc 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.