Correlation Between Canada Rare and Questor Technology

Can any of the company-specific risk be diversified away by investing in both Canada Rare and Questor Technology 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 Canada Rare and Questor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canada Rare Earth and Questor Technology, you can compare the effects of market volatilities on Canada Rare and Questor Technology 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 Canada Rare with a short position of Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Rare and Questor Technology.

Diversification Opportunities for Canada Rare and Questor Technology

-0.1

Correlation Coefficient

Canada Rare  Questor Technology

Good diversification

The 3 months correlation between Canada and Questor is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Canada Rare Earth and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and Canada Rare 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 Canada Rare Earth are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Canada Rare i.e., Canada Rare and Questor Technology go up and down completely randomly.

Pair Corralation between Canada Rare and Questor Technology

Given the investment horizon of 90 days Canada Rare Earth is expected to generate 3.27 times more return on investment than Questor Technology. However, Canada Rare is 3.27 times more volatile than Questor Technology. It trades about 0.06 of its potential returns per unit of risk. Questor Technology is currently generating about -0.03 per unit of risk. If you would invest  2.00  in Canada Rare Earth on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Canada Rare Earth or generate 0.0% return on investment over 90 days.

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

Canada Rare Earth  vs.  Questor Technology

Canada Rare Earth

Risk-Adjusted Performance

4 of 100

Insignificant

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

Questor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Questor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Canada Rare and Questor Technology

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

The idea behind Canada Rare Earth and Questor Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.