Correlation Between Queens Road and E Split

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

By analyzing existing cross correlation between Queens Road Capital and E Split Corp, you can compare the effects of market volatilities on Queens Road and E Split 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 Queens Road with a short position of E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and E Split.

Diversification Opportunities for Queens Road and E Split

-0.32

Correlation Coefficient

Queens Road  E Split

Very good diversification

The 3 months correlation between Queens and ENS-PA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split Corp and Queens Road 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 Queens Road Capital are associated (or correlated) with E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of Queens Road i.e., Queens Road and E Split go up and down completely randomly.

Pair Corralation between Queens Road and E Split

Assuming the 90 days trading horizon Queens Road Capital is expected to under-perform the E Split. In addition to that, Queens Road is 2.82 times more volatile than E Split Corp. It trades about -0.04 of its total potential returns per unit of risk. E Split Corp is currently generating about 0.11 per unit of volatility. If you would invest  1,052  in E Split Corp on September 27, 2024 and sell it today you would earn a total of  47.00  from holding E Split Corp or generate 4.47% return on investment over 90 days.

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

Queens Road Capital  vs.  E Split Corp

Queens Road Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Queens Road Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Queens Road is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

E Split Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, E Split is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Queens Road and E Split

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

The idea behind Queens Road Capital and E Split 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.