Correlation Between Queens Road and Amotiv

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

Diversification Opportunities for Queens Road and Amotiv

0.42

Correlation Coefficient

Queens Road  Amotiv

Very weak diversification

The 3 months correlation between Queens and Amotiv is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Amotiv Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amotiv Limited 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 Amotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amotiv Limited has no effect on the direction of Queens Road i.e., Queens Road and Amotiv go up and down completely randomly.

Pair Corralation between Queens Road and Amotiv

Assuming the 90 days trading horizon Queens Road Capital is expected to generate 1.62 times more return on investment than Amotiv. However, Queens Road is 1.62 times more volatile than Amotiv Limited. It trades about 0.01 of its potential returns per unit of risk. Amotiv Limited is currently generating about 0.01 per unit of risk. If you would invest  72.00  in Queens Road Capital on October 10, 2024 and sell it today you would lose (3.00) from holding Queens Road Capital or give up 4.17% of portfolio value over 90 days.

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

Queens Road Capital  vs.  Amotiv Limited

Queens Road Capital

Risk-Adjusted Performance

0 of 100

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 latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Amotiv Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amotiv Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amotiv is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Queens Road and Amotiv

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

The idea behind Queens Road Capital and Amotiv Limited 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.