Correlation Between Ballard Power and QC Copper
Can any of the company-specific risk be diversified away by investing in both Ballard Power and QC Copper 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 Ballard Power and QC Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ballard Power Systems and QC Copper and, you can compare the effects of market volatilities on Ballard Power and QC Copper 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 Ballard Power with a short position of QC Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and QC Copper.
Diversification Opportunities for Ballard Power and QC Copper
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ballard and QCCU is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper and Ballard Power 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 Ballard Power Systems are associated (or correlated) with QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of Ballard Power i.e., Ballard Power and QC Copper go up and down completely randomly.
Pair Corralation between Ballard Power and QC Copper
Assuming the 90 days trading horizon Ballard Power Systems is expected to generate 1.5 times more return on investment than QC Copper. However, Ballard Power is 1.5 times more volatile than QC Copper and. It trades about 0.3 of its potential returns per unit of risk. QC Copper and is currently generating about -0.11 per unit of risk. If you would invest 179.00 in Ballard Power Systems on September 13, 2024 and sell it today you would earn a total of 57.00 from holding Ballard Power Systems or generate 31.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ballard Power Systems vs. QC Copper and
Performance |
| Timeline |
| Ballard Power Systems |
| QC Copper |
Ballard Power and QC Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ballard Power and QC Copper
The main advantage of trading using opposite Ballard Power and QC Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballard Power position performs unexpectedly, QC Copper 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 QC Copper will offset losses from the drop in QC Copper's long position.| Ballard Power vs. Labrador Iron Ore | Ballard Power vs. DIRTT Environmental Solutions | Ballard Power vs. BluMetric Environmental | Ballard Power vs. Gatos Silver |
| QC Copper vs. Arizona Sonoran Copper | QC Copper vs. Marimaca Copper Corp | QC Copper vs. World Copper | QC Copper vs. Dore Copper Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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