Correlation Between Cabral Gold and Q2 Metals

Can any of the company-specific risk be diversified away by investing in both Cabral Gold and Q2 Metals 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 Cabral Gold and Q2 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cabral Gold and Q2 Metals Corp, you can compare the effects of market volatilities on Cabral Gold and Q2 Metals 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 Cabral Gold with a short position of Q2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabral Gold and Q2 Metals.

Diversification Opportunities for Cabral Gold and Q2 Metals

0.73

Correlation Coefficient

Cabral Gold  Q2 Metals

Poor diversification

The 3 months correlation between Cabral and QUEXF is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cabral Gold and Q2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Metals Corp and Cabral Gold 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 Cabral Gold are associated (or correlated) with Q2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Metals Corp has no effect on the direction of Cabral Gold i.e., Cabral Gold and Q2 Metals go up and down completely randomly.

Pair Corralation between Cabral Gold and Q2 Metals

Assuming the 90 days horizon Cabral Gold is expected to generate 1.18 times more return on investment than Q2 Metals. However, Cabral Gold is 1.18 times more volatile than Q2 Metals Corp. It trades about 0.14 of its potential returns per unit of risk. Q2 Metals Corp is currently generating about 0.09 per unit of risk. If you would invest  15.00  in Cabral Gold on December 29, 2024 and sell it today you would earn a total of  9.00  from holding Cabral Gold or generate 60.0% return on investment over 90 days.

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

Cabral Gold  vs.  Q2 Metals Corp

Cabral Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cabral Gold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cabral Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Q2 Metals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Metals Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Q2 Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cabral Gold and Q2 Metals

The main advantage of trading using opposite Cabral Gold and Q2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabral Gold position performs unexpectedly, Q2 Metals 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 Q2 Metals will offset losses from the drop in Q2 Metals' long position.

The idea behind Cabral Gold and Q2 Metals Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.