Correlation Between Quintain Steel and Champion Building
Can any of the company-specific risk be diversified away by investing in both Quintain Steel and Champion Building 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 Quintain Steel and Champion Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quintain Steel Co and Champion Building Materials, you can compare the effects of market volatilities on Quintain Steel and Champion Building 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 Quintain Steel with a short position of Champion Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintain Steel and Champion Building.
Diversification Opportunities for Quintain Steel and Champion Building
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quintain and Champion is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Champion Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Building and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Champion Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Building has no effect on the direction of Quintain Steel i.e., Quintain Steel and Champion Building go up and down completely randomly.
Pair Corralation between Quintain Steel and Champion Building
Assuming the 90 days trading horizon Quintain Steel Co is expected to under-perform the Champion Building. But the stock apears to be less risky and, when comparing its historical volatility, Quintain Steel Co is 2.37 times less risky than Champion Building. The stock trades about -0.37 of its potential returns per unit of risk. The Champion Building Materials is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Champion Building Materials on September 4, 2024 and sell it today you would lose (160.00) from holding Champion Building Materials or give up 13.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quintain Steel Co vs. Champion Building Materials
Performance |
| Timeline |
| Quintain Steel |
| Champion Building |
Quintain Steel and Champion Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quintain Steel and Champion Building
The main advantage of trading using opposite Quintain Steel and Champion Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quintain Steel position performs unexpectedly, Champion Building 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 Champion Building will offset losses from the drop in Champion Building's long position.The idea behind Quintain Steel Co and Champion Building Materials 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.| Champion Building vs. Universal Microelectronics Co | Champion Building vs. AVerMedia Technologies | Champion Building vs. Symtek Automation Asia | Champion Building vs. WiseChip Semiconductor |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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