Correlation Between QC Copper and Vista Gold

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

Diversification Opportunities for QC Copper and Vista Gold

0.31

Correlation Coefficient

QC Copper  Vista Gold

Weak diversification

The 3 months correlation between QCCU and Vista is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista 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 Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of QC Copper i.e., QC Copper and Vista Gold go up and down completely randomly.

Pair Corralation between QC Copper and Vista Gold

Assuming the 90 days trading horizon QC Copper is expected to generate 2.65 times less return on investment than Vista Gold. In addition to that, QC Copper is 1.26 times more volatile than Vista Gold. It trades about 0.02 of its total potential returns per unit of risk. Vista Gold is currently generating about 0.08 per unit of volatility. If you would invest  79.00  in Vista Gold on September 22, 2024 and sell it today you would earn a total of  4.00  from holding Vista Gold or generate 5.06% return on investment over 90 days.

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

QC Copper and  vs.  Vista Gold

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.

Vista Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vista Gold 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with QC Copper and Vista Gold

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

The idea behind QC Copper and and Vista 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.