Correlation Between Quantumscape Corp and NXT Energy
Can any of the company-specific risk be diversified away by investing in both Quantumscape Corp and NXT Energy 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 Quantumscape Corp and NXT Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantumscape Corp and NXT Energy Solutions, you can compare the effects of market volatilities on Quantumscape Corp and NXT Energy 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 Quantumscape Corp with a short position of NXT Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantumscape Corp and NXT Energy.
Diversification Opportunities for Quantumscape Corp and NXT Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quantumscape and NXT is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Quantumscape Corp and NXT Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXT Energy Solutions and Quantumscape Corp 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 Quantumscape Corp are associated (or correlated) with NXT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXT Energy Solutions has no effect on the direction of Quantumscape Corp i.e., Quantumscape Corp and NXT Energy go up and down completely randomly.
Pair Corralation between Quantumscape Corp and NXT Energy
Allowing for the 90-day total investment horizon Quantumscape Corp is expected to generate 1.15 times more return on investment than NXT Energy. However, Quantumscape Corp is 1.15 times more volatile than NXT Energy Solutions. It trades about 0.1 of its potential returns per unit of risk. NXT Energy Solutions is currently generating about -0.23 per unit of risk. If you would invest 833.00 in Quantumscape Corp on August 26, 2025 and sell it today you would earn a total of 314.00 from holding Quantumscape Corp or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantumscape Corp vs. NXT Energy Solutions
Performance |
| Timeline |
| Quantumscape Corp |
| NXT Energy Solutions |
Quantumscape Corp and NXT Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantumscape Corp and NXT Energy
The main advantage of trading using opposite Quantumscape Corp and NXT Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantumscape Corp position performs unexpectedly, NXT Energy 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 NXT Energy will offset losses from the drop in NXT Energy's long position.| Quantumscape Corp vs. Mobileye Global Class | Quantumscape Corp vs. Autoliv | Quantumscape Corp vs. BorgWarner | Quantumscape Corp vs. LKQ Corporation |
| NXT Energy vs. Petrofac | NXT Energy vs. Koil Energy Solutions | NXT Energy vs. Jericho Oil Corp | NXT Energy vs. Eco Oil Gas |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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