Correlation Between Grandeur Peak and Qs Large

Can any of the company-specific risk be diversified away by investing in both Grandeur Peak and Qs Large 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 Grandeur Peak and Qs Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grandeur Peak Global and Qs Large Cap, you can compare the effects of market volatilities on Grandeur Peak and Qs Large 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 Grandeur Peak with a short position of Qs Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandeur Peak and Qs Large.

Diversification Opportunities for Grandeur Peak and Qs Large

0.48

Correlation Coefficient

Grandeur Peak  Qs Large

Very weak diversification

The 3 months correlation between Grandeur and LMUSX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grandeur Peak Global and Qs Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Large Cap and Grandeur Peak 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 Grandeur Peak Global are associated (or correlated) with Qs Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Large Cap has no effect on the direction of Grandeur Peak i.e., Grandeur Peak and Qs Large go up and down completely randomly.

Pair Corralation between Grandeur Peak and Qs Large

Assuming the 90 days horizon Grandeur Peak Global is expected to under-perform the Qs Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Grandeur Peak Global is 1.3 times less risky than Qs Large. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Qs Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,439  in Qs Large Cap on October 25, 2024 and sell it today you would earn a total of  117.00  from holding Qs Large Cap or generate 4.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Grandeur Peak Global  vs.  Qs Large Cap

Grandeur Peak Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grandeur Peak Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Grandeur Peak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qs Large Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Large Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Qs Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grandeur Peak and Qs Large

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

The idea behind Grandeur Peak Global and Qs Large Cap 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.