Correlation Between Queens Road and In Touch
Can any of the company-specific risk be diversified away by investing in both Queens Road and In Touch 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 Queens Road and In Touch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Queens Road Capital and In Touch Survey Systems, you can compare the effects of market volatilities on Queens Road and In Touch 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 Queens Road with a short position of In Touch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and In Touch.
Diversification Opportunities for Queens Road and In Touch
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Queens and INX is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and In Touch Survey Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Touch Survey and Queens Road 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 Queens Road Capital are associated (or correlated) with In Touch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Touch Survey has no effect on the direction of Queens Road i.e., Queens Road and In Touch go up and down completely randomly.
Pair Corralation between Queens Road and In Touch
Assuming the 90 days trading horizon Queens Road is expected to generate 1.95 times less return on investment than In Touch. But when comparing it to its historical volatility, Queens Road Capital is 1.74 times less risky than In Touch. It trades about 0.01 of its potential returns per unit of risk. In Touch Survey Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 55.00 in In Touch Survey Systems on September 4, 2024 and sell it today you would lose (5.00) from holding In Touch Survey Systems or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Queens Road Capital vs. In Touch Survey Systems
Performance |
| Timeline |
| Queens Road Capital |
| In Touch Survey |
Queens Road and In Touch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Queens Road and In Touch
The main advantage of trading using opposite Queens Road and In Touch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road position performs unexpectedly, In Touch 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 In Touch will offset losses from the drop in In Touch's long position.The idea behind Queens Road Capital and In Touch Survey Systems 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.| In Touch vs. Quisitive Technology Solutions | In Touch vs. DGTL Holdings | In Touch vs. Plurilock Security | In Touch vs. iShares Canadian HYBrid |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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