Correlation Between QC Copper and Champion Iron
Can any of the company-specific risk be diversified away by investing in both QC Copper and Champion Iron 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 QC Copper and Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QC Copper and and Champion Iron, you can compare the effects of market volatilities on QC Copper and Champion Iron 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 QC Copper with a short position of Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of QC Copper and Champion Iron.
Diversification Opportunities for QC Copper and Champion Iron
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QCCU and Champion is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding QC Copper and and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron and QC Copper 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 QC Copper and are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of QC Copper i.e., QC Copper and Champion Iron go up and down completely randomly.
Pair Corralation between QC Copper and Champion Iron
Assuming the 90 days trading horizon QC Copper and is expected to generate 1.95 times more return on investment than Champion Iron. However, QC Copper is 1.95 times more volatile than Champion Iron. It trades about 0.01 of its potential returns per unit of risk. Champion Iron is currently generating about 0.0 per unit of risk. If you would invest 17.00 in QC Copper and on October 7, 2024 and sell it today you would lose (5.00) from holding QC Copper and or give up 29.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QC Copper and vs. Champion Iron
Performance |
| Timeline |
| QC Copper |
| Champion Iron |
QC Copper and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QC Copper and Champion Iron
The main advantage of trading using opposite QC Copper and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QC Copper position performs unexpectedly, Champion Iron 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 Iron will offset losses from the drop in Champion Iron's long position.| QC Copper vs. Mundoro Capital | QC Copper vs. BMO Aggregate Bond | QC Copper vs. iShares Canadian HYBrid | QC Copper vs. Brompton European Dividend |
| Champion Iron vs. Mundoro Capital | Champion Iron vs. BMO Aggregate Bond | Champion Iron vs. iShares Canadian HYBrid | Champion Iron vs. Brompton European Dividend |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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