Correlation Between Qubec Nickel and Asia Broadband

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

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

Diversification Opportunities for Qubec Nickel and Asia Broadband

0.13

Correlation Coefficient

Qubec Nickel  Asia Broadband

Average diversification

The 3 months correlation between Qubec and Asia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Asia Broadband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Broadband and Qubec Nickel 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 Qubec Nickel Corp are associated (or correlated) with Asia Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Broadband has no effect on the direction of Qubec Nickel i.e., Qubec Nickel and Asia Broadband go up and down completely randomly.

Pair Corralation between Qubec Nickel and Asia Broadband

Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 13.52 times more return on investment than Asia Broadband. However, Qubec Nickel is 13.52 times more volatile than Asia Broadband. It trades about 0.16 of its potential returns per unit of risk. Asia Broadband is currently generating about -0.06 per unit of risk. If you would invest  16.00  in Qubec Nickel Corp on September 12, 2024 and sell it today you would lose (7.71) from holding Qubec Nickel Corp or give up 48.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Qubec Nickel Corp  vs.  Asia Broadband

Qubec Nickel Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qubec Nickel Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Qubec Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Asia Broadband

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Broadband has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Qubec Nickel and Asia Broadband

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

The idea behind Qubec Nickel Corp and Asia Broadband 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.