Correlation Between Q Gold and Maritime Resources

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

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

Diversification Opportunities for Q Gold and Maritime Resources

-0.28

Correlation Coefficient

Q Gold  Maritime Resources

Very good diversification

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

Pair Corralation between Q Gold and Maritime Resources

Assuming the 90 days horizon Q Gold is expected to generate 8.78 times less return on investment than Maritime Resources. In addition to that, Q Gold is 1.54 times more volatile than Maritime Resources Corp. It trades about 0.01 of its total potential returns per unit of risk. Maritime Resources Corp is currently generating about 0.09 per unit of volatility. If you would invest  4.50  in Maritime Resources Corp on October 1, 2024 and sell it today you would earn a total of  1.00  from holding Maritime Resources Corp or generate 22.22% return on investment over 90 days.

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

Q Gold Resources  vs.  Maritime Resources Corp

Q Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Maritime Resources Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maritime Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Maritime Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Q Gold and Maritime Resources

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

The idea behind Q Gold Resources and Maritime Resources Corp 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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.