Correlation Between Q2 Metals and Brunswick Exploration

Can any of the company-specific risk be diversified away by investing in both Q2 Metals and Brunswick Exploration 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 Q2 Metals and Brunswick Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2 Metals Corp and Brunswick Exploration, you can compare the effects of market volatilities on Q2 Metals and Brunswick Exploration 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 Q2 Metals with a short position of Brunswick Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Metals and Brunswick Exploration.

Diversification Opportunities for Q2 Metals and Brunswick Exploration

0.54

Correlation Coefficient

Q2 Metals  Brunswick Exploration

Very weak diversification

The 3 months correlation between QTWO and Brunswick is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Metals Corp and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration and Q2 Metals 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 Q2 Metals Corp are associated (or correlated) with Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of Q2 Metals i.e., Q2 Metals and Brunswick Exploration go up and down completely randomly.

Pair Corralation between Q2 Metals and Brunswick Exploration

Assuming the 90 days trading horizon Q2 Metals Corp is expected to generate 1.03 times more return on investment than Brunswick Exploration. However, Q2 Metals is 1.03 times more volatile than Brunswick Exploration. It trades about -0.08 of its potential returns per unit of risk. Brunswick Exploration is currently generating about -0.1 per unit of risk. If you would invest  119.00  in Q2 Metals Corp on October 27, 2024 and sell it today you would lose (39.00) from holding Q2 Metals Corp or give up 32.77% of portfolio value over 90 days.

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

Q2 Metals Corp  vs.  Brunswick Exploration

Q2 Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2 Metals Corp 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 basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Brunswick Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Q2 Metals and Brunswick Exploration

The main advantage of trading using opposite Q2 Metals and Brunswick Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Metals position performs unexpectedly, Brunswick Exploration 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 Brunswick Exploration will offset losses from the drop in Brunswick Exploration's long position.

The idea behind Q2 Metals Corp and Brunswick Exploration 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..