Correlation Between Qubec Nickel and Spey Resources

Can any of the company-specific risk be diversified away by investing in both Qubec Nickel and Spey Resources 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 Qubec Nickel and Spey Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Qubec Nickel and Spey Resources

-0.55

Correlation Coefficient

Qubec Nickel  Spey Resources

Excellent diversification

The 3 months correlation between Qubec and Spey is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Spey Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spey Resources Corp and Qubec Nickel 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 Qubec Nickel Corp are associated (or correlated) with Spey Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spey Resources Corp has no effect on the direction of Qubec Nickel i.e., Qubec Nickel and Spey Resources go up and down completely randomly.

Pair Corralation between Qubec Nickel and Spey Resources

Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 4.52 times more return on investment than Spey Resources. However, Qubec Nickel is 4.52 times more volatile than Spey Resources Corp. It trades about 0.16 of its potential returns per unit of risk. Spey Resources Corp is currently generating about 0.07 per unit of risk. If you would invest  16.00  in Qubec Nickel Corp on September 18, 2024 and sell it today you would lose (7.55) from holding Qubec Nickel Corp or give up 47.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Qubec Nickel Corp  vs.  Spey Resources Corp

Qubec Nickel Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qubec Nickel Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Qubec Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Spey Resources Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spey Resources Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Spey Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qubec Nickel and Spey Resources

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

The idea behind Qubec Nickel Corp and Spey Resources 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.