Correlation Between Triple Flag and Queens Road

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

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

Diversification Opportunities for Triple Flag and Queens Road

0.46

Correlation Coefficient

Triple Flag  Queens Road

Very weak diversification

The 3 months correlation between Triple and Queens is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious 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 Triple Flag 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 Triple Flag Precious 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 Triple Flag i.e., Triple Flag and Queens Road go up and down completely randomly.

Pair Corralation between Triple Flag and Queens Road

Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 0.84 times more return on investment than Queens Road. However, Triple Flag Precious is 1.2 times less risky than Queens Road. It trades about 0.08 of its potential returns per unit of risk. Queens Road Capital is currently generating about 0.02 per unit of risk. If you would invest  2,150  in Triple Flag Precious on September 2, 2024 and sell it today you would earn a total of  172.00  from holding Triple Flag Precious or generate 8.0% return on investment over 90 days.

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

Triple Flag Precious  vs.  Queens Road Capital

Triple Flag Precious

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Triple Flag Precious are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Triple Flag may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Triple Flag and Queens Road

The main advantage of trading using opposite Triple Flag and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag 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 Triple Flag Precious 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.