Correlation Between QC Copper and Canaf Investments

Can any of the company-specific risk be diversified away by investing in both QC Copper and Canaf Investments 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 QC Copper and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for QC Copper and Canaf Investments

0.15

Correlation Coefficient

QC Copper  Canaf Investments

Average diversification

The 3 months correlation between QCCU and Canaf is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and QC Copper 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 QC Copper and are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of QC Copper i.e., QC Copper and Canaf Investments go up and down completely randomly.

Pair Corralation between QC Copper and Canaf Investments

Assuming the 90 days trading horizon QC Copper is expected to generate 21.4 times less return on investment than Canaf Investments. In addition to that, QC Copper is 1.07 times more volatile than Canaf Investments. It trades about 0.0 of its total potential returns per unit of risk. Canaf Investments is currently generating about 0.08 per unit of volatility. If you would invest  23.00  in Canaf Investments on September 28, 2024 and sell it today you would earn a total of  6.00  from holding Canaf Investments or generate 26.09% return on investment over 90 days.

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

QC Copper and  vs.  Canaf Investments

QC Copper

Risk-Adjusted Performance

0 of 100

Very Weak

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

Canaf Investments

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Canaf Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QC Copper and Canaf Investments

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

The idea behind QC Copper and and Canaf Investments 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.