Correlation Between Korea Zinc and Q Capital

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

By analyzing existing cross correlation between Korea Zinc and Q Capital Partners, you can compare the effects of market volatilities on Korea Zinc and Q Capital 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 Korea Zinc with a short position of Q Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Zinc and Q Capital.

Diversification Opportunities for Korea Zinc and Q Capital

-0.72

Correlation Coefficient

Korea Zinc  Q Capital

Pay attention - limited upside

The 3 months correlation between Korea and 016600 is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Korea Zinc and Q Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Capital Partners and Korea Zinc 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 Korea Zinc are associated (or correlated) with Q Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Capital Partners has no effect on the direction of Korea Zinc i.e., Korea Zinc and Q Capital go up and down completely randomly.

Pair Corralation between Korea Zinc and Q Capital

Assuming the 90 days trading horizon Korea Zinc is expected to under-perform the Q Capital. In addition to that, Korea Zinc is 1.66 times more volatile than Q Capital Partners. It trades about -0.04 of its total potential returns per unit of risk. Q Capital Partners is currently generating about 0.07 per unit of volatility. If you would invest  23,800  in Q Capital Partners on December 22, 2024 and sell it today you would earn a total of  2,100  from holding Q Capital Partners or generate 8.82% return on investment over 90 days.

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

Korea Zinc  vs.  Q Capital Partners

Korea Zinc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Korea Zinc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Q Capital Partners

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Q Capital Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Q Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Korea Zinc and Q Capital

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

The idea behind Korea Zinc and Q Capital Partners 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 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.