Correlation Between QC Copper and Aura Minerals

Can any of the company-specific risk be diversified away by investing in both QC Copper and Aura Minerals 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 Aura Minerals 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 Aura Minerals, you can compare the effects of market volatilities on QC Copper and Aura Minerals 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 Aura Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of QC Copper and Aura Minerals.

Diversification Opportunities for QC Copper and Aura Minerals

-0.28

Correlation Coefficient

QC Copper  Aura Minerals

Very good diversification

The 3 months correlation between QCCU and Aura is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and Aura Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Minerals 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 Aura Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Minerals has no effect on the direction of QC Copper i.e., QC Copper and Aura Minerals go up and down completely randomly.

Pair Corralation between QC Copper and Aura Minerals

Assuming the 90 days trading horizon QC Copper is expected to generate 5.17 times less return on investment than Aura Minerals. In addition to that, QC Copper is 1.57 times more volatile than Aura Minerals. It trades about 0.02 of its total potential returns per unit of risk. Aura Minerals is currently generating about 0.15 per unit of volatility. If you would invest  1,537  in Aura Minerals on September 13, 2024 and sell it today you would earn a total of  341.00  from holding Aura Minerals or generate 22.19% 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.  Aura Minerals

QC Copper

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QC Copper and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, QC Copper is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Aura Minerals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aura Minerals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Aura Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QC Copper and Aura Minerals

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

The idea behind QC Copper and and Aura 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.