Correlation Between Q2 Metals and Lion One
Can any of the company-specific risk be diversified away by investing in both Q2 Metals and Lion One 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 Q2 Metals and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q2 Metals Corp and Lion One Metals, you can compare the effects of market volatilities on Q2 Metals and Lion One 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 Q2 Metals with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Metals and Lion One.
Diversification Opportunities for Q2 Metals and Lion One
Very weak diversification
The 3 months correlation between QTWO and Lion is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Metals Corp and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Q2 Metals 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 Q2 Metals Corp are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Q2 Metals i.e., Q2 Metals and Lion One go up and down completely randomly.
Pair Corralation between Q2 Metals and Lion One
Assuming the 90 days trading horizon Q2 Metals Corp is expected to generate 1.45 times more return on investment than Lion One. However, Q2 Metals is 1.45 times more volatile than Lion One Metals. It trades about -0.04 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.1 per unit of risk. If you would invest 101.00 in Q2 Metals Corp on September 13, 2024 and sell it today you would lose (9.00) from holding Q2 Metals Corp or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Q2 Metals Corp vs. Lion One Metals
Performance |
| Timeline |
| Q2 Metals Corp |
| Lion One Metals |
Q2 Metals and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2 Metals and Lion One
The main advantage of trading using opposite Q2 Metals and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Metals position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Q2 Metals vs. First Majestic Silver | Q2 Metals vs. Ivanhoe Energy | Q2 Metals vs. Orezone Gold Corp | Q2 Metals vs. Faraday Copper Corp |
| Lion One vs. Arizona Sonoran Copper | Lion One vs. Marimaca Copper Corp | Lion One vs. World Copper | Lion One vs. QC Copper and |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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