Correlation Between QC Copper and First National

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

By analyzing existing cross correlation between QC Copper and and First National Financial, you can compare the effects of market volatilities on QC Copper and First National 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 QC Copper with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of QC Copper and First National.

Diversification Opportunities for QC Copper and First National

-0.35

Correlation Coefficient

QC Copper  First National

Very good diversification

The 3 months correlation between QCCU and First is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and First National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Financial and QC Copper 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 QC Copper and are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Financial has no effect on the direction of QC Copper i.e., QC Copper and First National go up and down completely randomly.

Pair Corralation between QC Copper and First National

Assuming the 90 days trading horizon QC Copper and is expected to under-perform the First National. In addition to that, QC Copper is 2.85 times more volatile than First National Financial. It trades about -0.01 of its total potential returns per unit of risk. First National Financial is currently generating about 0.09 per unit of volatility. If you would invest  1,456  in First National Financial on September 25, 2024 and sell it today you would earn a total of  119.00  from holding First National Financial or generate 8.17% return on investment over 90 days.

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

QC Copper and  vs.  First National Financial

QC Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QC Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, QC Copper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First National Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First National Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, First National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with QC Copper and First National

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

The idea behind QC Copper and and First National Financial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..