Can some company-specific risk be mitigated by investing in Solana and QTUM simultaneously? This lesson helps to comprehend the diversifiable risk of integrating Solana and QTUM into the same portfolio, which is a vital aspect of portfolio management.
By assessing the current cross-correlation between Solana and QTUM, it is possible to analyse the impacts of market volatility on Solana and QTUM and determine how they will mitigate market risk if included in the same portfolio over a certain time horizon. You can also use pair trading methods by combining a long Solana trade with a short QTUM one.
Opportunities for Solana and QTUM to Diversify
The correlation between Solana and QTUM after three months is 0.77. The overlapping area indicates the amount of risk that may be mitigated by owning Solana and QTUM in the same portfolio, provided no other changes are made. The correlation between the past prices or returns of QTUM and Solana is a relative statistical measure indicating the extent to which these equity instruments tend to move.
The correlation coefficient quantifies the degree to which Solana returns are connected with QTUM returns. The range of correlation coefficient values is from -1 to 1. The correlation of zero (0) is achievable when the price movement of QTUM has no influence on the direction of Solana, i.e., when the price movements of Solana and QTUM are entirely random.
Correlation Between the Solana and QTUM Pairs
Assuming a trading horizon of 90 days, Solana is anticipated to underperform QTUM. Solana’s historical volatility is 1.1 times less volatile than that of QTUM, indicating that the cryptocoin seems to be less volatile. Approximately -0.08 percent of the coin’s potential rewards per unit of risk are traded. The QTUM yields around -0.07 returns per unit of risk over a comparable time period. If you invested $1,319 in QTUM on February 7, 2022 and sold it today, you would incur a loss of $774.00 or lose 58.68% of your portfolio value over the course of 90 days.
Trading Solana and QTUM in Pairs
The primary benefit of trading with opposing Solana and QTUM positions is the reduction of unsystematic risk. Due to two independent transactions, even if Solana’s position performs erratically, QTUM may offset some of the losses. Additionally, pair trading mitigates risk from directional market swings. For instance, if an entire industry or sector falls due to unexpected news, QTUM’s short position will balance losses from the decline in its long position.
The goal of trading Solana and QTUM pairings is to make the combined position market-neutral, meaning that the broader market’s movement has no bearing on the position’s profit or loss (or potential downside or upside). This may be accomplished by structuring a pairs trade with two highly correlated stocks or shares that operate in a same area or sector, so making it feasible to generate profits via easy and relatively low-risk investing.
2030 Solana (SOL) Price Prediction
When QTUM first appeared on the exchanges on September 13, 2017, its price was $12. The asset traded in a trading range of $7 to $17 until November of that year. On December 13, Qtum managed to overcome the $17 resistance level and QTUM price prediction 2018 was $99 by January 7, 2018. Qtum’s involvement at BlockShow Asia in November coincided with the expansion. Prior to this event, the QTUM cryptocurrency was undervalued.
As the cryptocurrency market is so volatile, it is difficult to establish long-term price forecasts. However, make some crazy assumptions and projections.
There is a chance that by 2030, the whole crypto sector may have collapsed either to severe laws or a more imaginative rival supplanting blockchain and cryptocurrency.
Trading Solana price prediction 2030 is as follows: if the SOL coin demonstrates its value and continues to be one of the leading cryptocurrencies on the market, it might reach as high as $3,000 in 2030.
