Correlation Between QKC and REDLANG
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By analyzing existing cross correlation between QKC and REDLANG, you can compare the effects of market volatilities on QKC and REDLANG 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 QKC with a short position of REDLANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of QKC and REDLANG.
Diversification Opportunities for QKC and REDLANG
Very weak diversification
The 3 months correlation between QKC and REDLANG is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding QKC and REDLANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDLANG and QKC 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 QKC are associated (or correlated) with REDLANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDLANG has no effect on the direction of QKC i.e., QKC and REDLANG go up and down completely randomly.
Pair Corralation between QKC and REDLANG
Assuming the 90 days trading horizon QKC is expected to under-perform the REDLANG. But the crypto coin apears to be less risky and, when comparing its historical volatility, QKC is 1.72 times less risky than REDLANG. The crypto coin trades about -0.29 of its potential returns per unit of risk. The REDLANG is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 0.13 in REDLANG on November 9, 2024 and sell it today you would lose (0.04) from holding REDLANG or give up 34.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QKC vs. REDLANG
Performance |
| Timeline |
| QKC |
| REDLANG |
QKC and REDLANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QKC and REDLANG
The main advantage of trading using opposite QKC and REDLANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QKC position performs unexpectedly, REDLANG 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 REDLANG will offset losses from the drop in REDLANG's long position.The idea behind QKC and REDLANG 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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