Correlation Between Queens Road and Canlan Ice

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

Diversification Opportunities for Queens Road and Canlan Ice

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Queens and Canlan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Queens Road i.e., Queens Road and Canlan Ice go up and down completely randomly.

Pair Corralation between Queens Road and Canlan Ice

Assuming the 90 days trading horizon Queens Road is expected to generate 5.04 times less return on investment than Canlan Ice. In addition to that, Queens Road is 1.29 times more volatile than Canlan Ice Sports. It trades about 0.01 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.07 per unit of volatility. If you would invest  382.00  in Canlan Ice Sports on September 5, 2024 and sell it today you would earn a total of  28.00  from holding Canlan Ice Sports or generate 7.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Queens Road Capital  vs.  Canlan Ice Sports

 Performance 
       Timeline  
Queens Road Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 very healthy fundamental indicators, Queens Road is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Canlan Ice Sports 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Canlan Ice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Queens Road and Canlan Ice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Queens Road and Canlan Ice

The main advantage of trading using opposite Queens Road and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.
The idea behind Queens Road Capital and Canlan Ice Sports 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.
Check out your portfolio center.
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.

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