Correlation Between Queens Road and Amazon CDR

Can any of the company-specific risk be diversified away by investing in both Queens Road and Amazon CDR 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 Queens Road and Amazon CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Queens Road Capital and Amazon CDR, you can compare the effects of market volatilities on Queens Road and Amazon CDR 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 Queens Road with a short position of Amazon CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and Amazon CDR.

Diversification Opportunities for Queens Road and Amazon CDR

0.84

Correlation Coefficient

Queens Road  Amazon CDR

Very poor diversification

The 3 months correlation between Queens and Amazon is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR and Queens Road 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 Queens Road Capital are associated (or correlated) with Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of Queens Road i.e., Queens Road and Amazon CDR go up and down completely randomly.

Pair Corralation between Queens Road and Amazon CDR

Assuming the 90 days trading horizon Queens Road Capital is expected to under-perform the Amazon CDR. In addition to that, Queens Road is 1.36 times more volatile than Amazon CDR. It trades about -0.11 of its total potential returns per unit of risk. Amazon CDR is currently generating about -0.13 per unit of volatility. If you would invest  2,678  in Amazon CDR on December 23, 2024 and sell it today you would lose (356.00) from holding Amazon CDR or give up 13.29% of portfolio value over 90 days.

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

Queens Road Capital  vs.  Amazon CDR

Queens Road Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Capital 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 fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Amazon CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amazon CDR 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Queens Road and Amazon CDR

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

The idea behind Queens Road Capital and Amazon CDR 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.