Correlation Between QKC and Big Time
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By analyzing existing cross correlation between QKC and Big Time, you can compare the effects of market volatilities on QKC and Big Time 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 QKC with a short position of Big Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of QKC and Big Time.
Diversification Opportunities for QKC and Big Time
Modest diversification
The 3 months correlation between QKC and Big is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding QKC and Big Time in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Time and QKC 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 QKC are associated (or correlated) with Big Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Time has no effect on the direction of QKC i.e., QKC and Big Time go up and down completely randomly.
Pair Corralation between QKC and Big Time
Assuming the 90 days trading horizon QKC is expected to generate 3.43 times more return on investment than Big Time. However, QKC is 3.43 times more volatile than Big Time. It trades about 0.18 of its potential returns per unit of risk. Big Time is currently generating about 0.14 per unit of risk. If you would invest 0.79 in QKC on September 4, 2024 and sell it today you would earn a total of 0.46 from holding QKC or generate 58.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QKC vs. Big Time
Performance |
| Timeline |
| QKC |
| Big Time |
QKC and Big Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QKC and Big Time
The main advantage of trading using opposite QKC and Big Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QKC position performs unexpectedly, Big Time 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 Big Time will offset losses from the drop in Big Time's long position.The idea behind QKC and Big Time 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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