Correlation Between Sendero Resources and Queens Road

Can any of the company-specific risk be diversified away by investing in both Sendero Resources and Queens Road 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 Sendero Resources and Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sendero Resources Corp and Queens Road Capital, you can compare the effects of market volatilities on Sendero Resources and Queens Road 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 Sendero Resources with a short position of Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendero Resources and Queens Road.

Diversification Opportunities for Sendero Resources and Queens Road

-0.13

Correlation Coefficient

Sendero Resources  Queens Road

Good diversification

The 3 months correlation between Sendero and Queens is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sendero Resources Corp and Queens Road Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Capital and Sendero Resources 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 Sendero Resources Corp are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Capital has no effect on the direction of Sendero Resources i.e., Sendero Resources and Queens Road go up and down completely randomly.

Pair Corralation between Sendero Resources and Queens Road

Assuming the 90 days trading horizon Sendero Resources Corp is expected to generate 4.68 times more return on investment than Queens Road. However, Sendero Resources is 4.68 times more volatile than Queens Road Capital. It trades about 0.02 of its potential returns per unit of risk. Queens Road Capital is currently generating about 0.01 per unit of risk. If you would invest  160.00  in Sendero Resources Corp on October 1, 2024 and sell it today you would lose (116.00) from holding Sendero Resources Corp or give up 72.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.61%
Values	Daily Returns

Sendero Resources Corp  vs.  Queens Road Capital

Sendero Resources Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sendero Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sendero Resources showed solid returns over the last few months and may actually be approaching a breakup point.

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 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.

Pair Trading with Sendero Resources and Queens Road

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

The idea behind Sendero Resources Corp and Queens Road Capital 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.