Correlation Between ExGen Resources and Q Gold

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

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

Diversification Opportunities for ExGen Resources and Q Gold

0.27

Correlation Coefficient

ExGen Resources  Q Gold

Modest diversification

The 3 months correlation between ExGen and QGR is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ExGen Resources and Q Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Gold Resources and ExGen Resources 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 ExGen Resources are associated (or correlated) with Q Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Gold Resources has no effect on the direction of ExGen Resources i.e., ExGen Resources and Q Gold go up and down completely randomly.

Pair Corralation between ExGen Resources and Q Gold

Assuming the 90 days horizon ExGen Resources is not expected to generate positive returns. Moreover, ExGen Resources is 1.52 times more volatile than Q Gold Resources. It trades away all of its potential returns to assume current level of volatility. Q Gold Resources is currently generating about -0.01 per unit of risk. If you would invest  8.00  in ExGen Resources on September 15, 2024 and sell it today you would lose (1.00) from holding ExGen Resources or give up 12.5% of portfolio value over 90 days.

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

ExGen Resources  vs.  Q Gold Resources

ExGen Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ExGen Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ExGen Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Q Gold Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Q Gold Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Q Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExGen Resources and Q Gold

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

The idea behind ExGen Resources and Q Gold Resources 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.