Correlation Between Canoe EIT and QMC Quantum

Can any of the company-specific risk be diversified away by investing in both Canoe EIT and QMC Quantum 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 Canoe EIT and QMC Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canoe EIT Income and QMC Quantum Minerals, you can compare the effects of market volatilities on Canoe EIT and QMC Quantum 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 Canoe EIT with a short position of QMC Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoe EIT and QMC Quantum.

Diversification Opportunities for Canoe EIT and QMC Quantum

-0.62

Correlation Coefficient

Canoe EIT  QMC Quantum

Excellent diversification

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

Pair Corralation between Canoe EIT and QMC Quantum

Assuming the 90 days trading horizon Canoe EIT is expected to generate 1.19 times less return on investment than QMC Quantum. But when comparing it to its historical volatility, Canoe EIT Income is 12.3 times less risky than QMC Quantum. It trades about 0.11 of its potential returns per unit of risk. QMC Quantum Minerals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  12.00  in QMC Quantum Minerals on September 22, 2024 and sell it today you would lose (6.50) from holding QMC Quantum Minerals or give up 54.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Canoe EIT Income  vs.  QMC Quantum Minerals

Canoe EIT Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canoe EIT Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Canoe EIT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

QMC Quantum Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QMC Quantum Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Canoe EIT and QMC Quantum

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

The idea behind Canoe EIT Income and QMC Quantum Minerals 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.