Correlation Between Magnum Goldcorp and Quantum Numbers

Can any of the company-specific risk be diversified away by investing in both Magnum Goldcorp and Quantum Numbers 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 Magnum Goldcorp and Quantum Numbers into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Magnum Goldcorp and Quantum Numbers

0.0

Correlation Coefficient

Magnum Goldcorp  Quantum Numbers

Pay attention - limited upside

The 3 months correlation between Magnum and Quantum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magnum Goldcorp and Quantum Numbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Numbers and Magnum Goldcorp 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 Magnum Goldcorp are associated (or correlated) with Quantum Numbers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Numbers has no effect on the direction of Magnum Goldcorp i.e., Magnum Goldcorp and Quantum Numbers go up and down completely randomly.

Pair Corralation between Magnum Goldcorp and Quantum Numbers

Assuming the 90 days horizon Magnum Goldcorp is expected to generate 0.53 times more return on investment than Quantum Numbers. However, Magnum Goldcorp is 1.88 times less risky than Quantum Numbers. It trades about 0.02 of its potential returns per unit of risk. Quantum Numbers is currently generating about 0.0 per unit of risk. If you would invest  5.00  in Magnum Goldcorp on December 27, 2024 and sell it today you would lose (0.50) from holding Magnum Goldcorp or give up 10.0% of portfolio value over 90 days.

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

Magnum Goldcorp  vs.  Quantum Numbers

Magnum Goldcorp

Risk-Adjusted Performance

Weak

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

Quantum Numbers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantum Numbers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Quantum Numbers is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Magnum Goldcorp and Quantum Numbers

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

The idea behind Magnum Goldcorp and Quantum Numbers 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.