Correlation Between QC Copper and Carlin Gold

Can any of the company-specific risk be diversified away by investing in both QC Copper and Carlin Gold 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 Carlin Gold 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 Carlin Gold, you can compare the effects of market volatilities on QC Copper and Carlin Gold 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 Carlin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of QC Copper and Carlin Gold.

Diversification Opportunities for QC Copper and Carlin Gold

-0.24

Correlation Coefficient

QC Copper  Carlin Gold

Very good diversification

The 3 months correlation between QCCU and Carlin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and Carlin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlin Gold 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 Carlin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlin Gold has no effect on the direction of QC Copper i.e., QC Copper and Carlin Gold go up and down completely randomly.

Pair Corralation between QC Copper and Carlin Gold

Assuming the 90 days trading horizon QC Copper is expected to generate 2.99 times less return on investment than Carlin Gold. But when comparing it to its historical volatility, QC Copper and is 1.74 times less risky than Carlin Gold. It trades about 0.02 of its potential returns per unit of risk. Carlin Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Carlin Gold on September 16, 2024 and sell it today you would lose (4.00) from holding Carlin Gold or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

QC Copper and  vs.  Carlin Gold

QC Copper

Risk-Adjusted Performance

6 of 100

Modest

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

Carlin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with QC Copper and Carlin Gold

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

The idea behind QC Copper and and Carlin Gold 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.