Correlation Between Quebec Precious and Klondike Gold

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

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

Diversification Opportunities for Quebec Precious and Klondike Gold

-0.03

Correlation Coefficient

Quebec Precious  Klondike Gold

Good diversification

The 3 months correlation between Quebec and Klondike is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Quebec Precious Metals and Klondike Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Gold Corp and Quebec Precious 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 Quebec Precious Metals are associated (or correlated) with Klondike Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Gold Corp has no effect on the direction of Quebec Precious i.e., Quebec Precious and Klondike Gold go up and down completely randomly.

Pair Corralation between Quebec Precious and Klondike Gold

Assuming the 90 days horizon Quebec Precious Metals is expected to under-perform the Klondike Gold. In addition to that, Quebec Precious is 1.37 times more volatile than Klondike Gold Corp. It trades about -0.07 of its total potential returns per unit of risk. Klondike Gold Corp is currently generating about 0.01 per unit of volatility. If you would invest  5.67  in Klondike Gold Corp on October 6, 2024 and sell it today you would lose (0.67) from holding Klondike Gold Corp or give up 11.82% of portfolio value over 90 days.

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

Quebec Precious Metals  vs.  Klondike Gold Corp

Quebec Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quebec Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Klondike Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klondike Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Klondike Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Quebec Precious and Klondike Gold

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

The idea behind Quebec Precious Metals and Klondike Gold 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.