Correlation Between Queens Road and Helios Fairfax

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

Diversification Opportunities for Queens Road and Helios Fairfax

0.29

Correlation Coefficient

Queens Road  Helios Fairfax

Modest diversification

The 3 months correlation between Queens and Helios is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Queens Road i.e., Queens Road and Helios Fairfax go up and down completely randomly.

Pair Corralation between Queens Road and Helios Fairfax

Assuming the 90 days trading horizon Queens Road Capital is expected to under-perform the Helios Fairfax. But the stock apears to be less risky and, when comparing its historical volatility, Queens Road Capital is 1.93 times less risky than Helios Fairfax. The stock trades about -0.08 of its potential returns per unit of risk. The Helios Fairfax Partners is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  260.00  in Helios Fairfax Partners on December 25, 2024 and sell it today you would lose (30.00) from holding Helios Fairfax Partners or give up 11.54% of portfolio value over 90 days.

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

Queens Road Capital  vs.  Helios Fairfax Partners

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 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.

Helios Fairfax Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Helios Fairfax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Queens Road and Helios Fairfax

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

The idea behind Queens Road Capital and Helios Fairfax Partners 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.