Correlation Between Nicholas Fund and Qs Global

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

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

Diversification Opportunities for Nicholas Fund and Qs Global

0.89

Correlation Coefficient

Nicholas Fund  Qs Global

Very poor diversification

The 3 months correlation between Nicholas and SMYIX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Fund Inc and Qs Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Global Equity and Nicholas Fund 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 Nicholas Fund Inc are associated (or correlated) with Qs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Global Equity has no effect on the direction of Nicholas Fund i.e., Nicholas Fund and Qs Global go up and down completely randomly.

Pair Corralation between Nicholas Fund and Qs Global

Assuming the 90 days horizon Nicholas Fund Inc is expected to under-perform the Qs Global. In addition to that, Nicholas Fund is 1.13 times more volatile than Qs Global Equity. It trades about -0.27 of its total potential returns per unit of risk. Qs Global Equity is currently generating about -0.19 per unit of volatility. If you would invest  2,570  in Qs Global Equity on October 11, 2024 and sell it today you would lose (117.00) from holding Qs Global Equity or give up 4.55% of portfolio value over 90 days.

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

Nicholas Fund Inc  vs.  Qs Global Equity

Nicholas Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Qs Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nicholas Fund and Qs Global

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

The idea behind Nicholas Fund Inc and Qs Global Equity 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.