Correlation Between Arqit Quantum and DeNA

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Can any of the company-specific risk be diversified away by investing in both Arqit Quantum and DeNA 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 DeNA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arqit Quantum and DeNA Co, you can compare the effects of market volatilities on Arqit Quantum and DeNA 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 DeNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arqit Quantum and DeNA.

Diversification Opportunities for Arqit Quantum and DeNA

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Arqit and DeNA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Arqit Quantum and DeNA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeNA 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 are associated (or correlated) with DeNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeNA has no effect on the direction of Arqit Quantum i.e., Arqit Quantum and DeNA go up and down completely randomly.

Pair Corralation between Arqit Quantum and DeNA

Given the investment horizon of 90 days Arqit Quantum is expected to generate 55.75 times more return on investment than DeNA. However, Arqit Quantum is 55.75 times more volatile than DeNA Co. It trades about 0.14 of its potential returns per unit of risk. DeNA Co is currently generating about 0.15 per unit of risk. If you would invest  498.00  in Arqit Quantum on September 10, 2022 and sell it today you would earn a total of  267.00  from holding Arqit Quantum or generate 53.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Arqit Quantum  vs.  DeNA Co

 Performance (%) 
       Timeline  
Arqit Quantum 
Arqit Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Arqit Quantum are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Arqit Quantum may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Arqit Price Channel

DeNA 
DeNA Performance
0 of 100
Over the last 90 days DeNA Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

DeNA Price Channel

Arqit Quantum and DeNA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arqit Quantum and DeNA

The main advantage of trading using opposite Arqit Quantum and DeNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arqit Quantum position performs unexpectedly, DeNA 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 DeNA will offset losses from the drop in DeNA's long position.
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The idea behind Arqit Quantum and DeNA Co 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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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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