Correlation Between Questerre Energy and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Questerre Energy and Eastern Platinum 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 Questerre Energy and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Questerre Energy and Eastern Platinum Limited, you can compare the effects of market volatilities on Questerre Energy and Eastern Platinum 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 Questerre Energy with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Questerre Energy and Eastern Platinum.
Diversification Opportunities for Questerre Energy and Eastern Platinum
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Questerre and Eastern is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Questerre Energy and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and Questerre Energy 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 Questerre Energy are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Questerre Energy i.e., Questerre Energy and Eastern Platinum go up and down completely randomly.
Pair Corralation between Questerre Energy and Eastern Platinum
Assuming the 90 days trading horizon Questerre Energy is expected to generate 1.86 times more return on investment than Eastern Platinum. However, Questerre Energy is 1.86 times more volatile than Eastern Platinum Limited. It trades about 0.3 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.01 per unit of risk. If you would invest 23.00 in Questerre Energy on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Questerre Energy or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Questerre Energy vs. Eastern Platinum Limited
Performance |
| Timeline |
| Questerre Energy |
| Eastern Platinum |
Questerre Energy and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Questerre Energy and Eastern Platinum
The main advantage of trading using opposite Questerre Energy and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Questerre Energy position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.The idea behind Questerre Energy and Eastern Platinum Limited 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.| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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