Correlation Between Maple Gold and Q Gold

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

By analyzing existing cross correlation between Maple Gold Mines and Q Gold Resources, you can compare the effects of market volatilities on Maple Gold and Q Gold 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 Maple Gold with a short position of Q Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Gold and Q Gold.

Diversification Opportunities for Maple Gold and Q Gold

0.64

Correlation Coefficient

Maple Gold  Q Gold

Poor diversification

The 3 months correlation between Maple and QGR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Maple Gold Mines and Q Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Gold Resources and Maple Gold 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 Maple Gold Mines are associated (or correlated) with Q Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Gold Resources has no effect on the direction of Maple Gold i.e., Maple Gold and Q Gold go up and down completely randomly.

Pair Corralation between Maple Gold and Q Gold

Assuming the 90 days horizon Maple Gold Mines is expected to under-perform the Q Gold. But the stock apears to be less risky and, when comparing its historical volatility, Maple Gold Mines is 2.85 times less risky than Q Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Q Gold Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Q Gold Resources on September 29, 2024 and sell it today you would earn a total of  11.00  from holding Q Gold Resources or generate 366.67% return on investment over 90 days.

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

Maple Gold Mines  vs.  Q Gold Resources

Maple Gold Mines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Q Gold Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Q Gold Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Q Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Maple Gold and Q Gold

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

The idea behind Maple Gold Mines and Q Gold Resources 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.