Correlation Between Queens Road and Nutrien

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

Diversification Opportunities for Queens Road and Nutrien

0.24

Correlation Coefficient

Queens Road  Nutrien

Modest diversification

The 3 months correlation between Queens and Nutrien is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Queens Road i.e., Queens Road and Nutrien go up and down completely randomly.

Pair Corralation between Queens Road and Nutrien

Assuming the 90 days trading horizon Queens Road is expected to generate 3.72 times less return on investment than Nutrien. In addition to that, Queens Road is 1.61 times more volatile than Nutrien. It trades about 0.02 of its total potential returns per unit of risk. Nutrien is currently generating about 0.12 per unit of volatility. If you would invest  6,219  in Nutrien on September 12, 2024 and sell it today you would earn a total of  664.00  from holding Nutrien or generate 10.68% return on investment over 90 days.

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

Queens Road Capital  vs.  Nutrien

Queens Road Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Nutrien

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Nutrien may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Queens Road and Nutrien

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

The idea behind Queens Road Capital and Nutrien 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.