Correlation Between Snow Capital and Qs International

Can any of the company-specific risk be diversified away by investing in both Snow Capital and Qs International 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 Snow Capital and Qs International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Snow Capital Opportunity and Qs International Equity, you can compare the effects of market volatilities on Snow Capital and Qs International 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 Snow Capital with a short position of Qs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snow Capital and Qs International.

Diversification Opportunities for Snow Capital and Qs International

0.62

Correlation Coefficient

Snow Capital  Qs International

Poor diversification

The 3 months correlation between Snow and LGFEX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Snow Capital Opportunity and Qs International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs International Equity and Snow Capital 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 Snow Capital Opportunity are associated (or correlated) with Qs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs International Equity has no effect on the direction of Snow Capital i.e., Snow Capital and Qs International go up and down completely randomly.

Pair Corralation between Snow Capital and Qs International

Assuming the 90 days horizon Snow Capital Opportunity is expected to generate 0.92 times more return on investment than Qs International. However, Snow Capital Opportunity is 1.08 times less risky than Qs International. It trades about 0.01 of its potential returns per unit of risk. Qs International Equity is currently generating about -0.01 per unit of risk. If you would invest  3,249  in Snow Capital Opportunity on October 7, 2024 and sell it today you would earn a total of  30.00  from holding Snow Capital Opportunity or generate 0.92% return on investment over 90 days.

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

Snow Capital Opportunity  vs.  Qs International Equity

Snow Capital Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snow Capital Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Snow Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qs International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qs International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Snow Capital and Qs International

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

The idea behind Snow Capital Opportunity and Qs International Equity 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.