Correlation Between Q Gold and Outback Goldfields

Can any of the company-specific risk be diversified away by investing in both Q Gold and Outback Goldfields 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 Q Gold and Outback Goldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q Gold Resources and Outback Goldfields Corp, you can compare the effects of market volatilities on Q Gold and Outback Goldfields 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 Q Gold with a short position of Outback Goldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q Gold and Outback Goldfields.

Diversification Opportunities for Q Gold and Outback Goldfields

-0.39

Correlation Coefficient

Q Gold  Outback Goldfields

Very good diversification

The 3 months correlation between QGR and Outback is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Q Gold Resources and Outback Goldfields Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outback Goldfields Corp and Q Gold 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 Q Gold Resources are associated (or correlated) with Outback Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outback Goldfields Corp has no effect on the direction of Q Gold i.e., Q Gold and Outback Goldfields go up and down completely randomly.

Pair Corralation between Q Gold and Outback Goldfields

Assuming the 90 days horizon Q Gold Resources is expected to under-perform the Outback Goldfields. In addition to that, Q Gold is 1.29 times more volatile than Outback Goldfields Corp. It trades about -0.08 of its total potential returns per unit of risk. Outback Goldfields Corp is currently generating about 0.05 per unit of volatility. If you would invest  30.00  in Outback Goldfields Corp on December 25, 2024 and sell it today you would earn a total of  3.00  from holding Outback Goldfields Corp or generate 10.0% return on investment over 90 days.

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

Q Gold Resources  vs.  Outback Goldfields Corp

Q Gold Resources

Risk-Adjusted Performance

Very Weak

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

Outback Goldfields Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Outback Goldfields Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Outback Goldfields showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Q Gold and Outback Goldfields

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

The idea behind Q Gold Resources and Outback Goldfields Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.