Correlation Between Qs Growth and International Equity

Can any of the company-specific risk be diversified away by investing in both Qs Growth and International Equity 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 Qs Growth and International Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qs Growth Fund and International Equity Index, you can compare the effects of market volatilities on Qs Growth and International Equity 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 Qs Growth with a short position of International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Growth and International Equity.

Diversification Opportunities for Qs Growth and International Equity

0.42

Correlation Coefficient

Qs Growth  International Equity

Very weak diversification

The 3 months correlation between LLLRX and International is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Qs Growth Fund and International Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity and Qs Growth 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 Qs Growth Fund are associated (or correlated) with International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Qs Growth i.e., Qs Growth and International Equity go up and down completely randomly.

Pair Corralation between Qs Growth and International Equity

Assuming the 90 days horizon Qs Growth is expected to generate 1.02 times less return on investment than International Equity. But when comparing it to its historical volatility, Qs Growth Fund is 1.31 times less risky than International Equity. It trades about 0.18 of its potential returns per unit of risk. International Equity Index is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,334  in International Equity Index on May 16, 2025 and sell it today you would earn a total of  91.00  from holding International Equity Index or generate 6.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Qs Growth Fund  vs.  International Equity Index

Qs Growth Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Growth Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Qs Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

International Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in International Equity Index are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, International Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Qs Growth and International Equity

The main advantage of trading using opposite Qs Growth and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Growth position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.

The idea behind Qs Growth Fund and International Equity Index 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.