Correlation Between WisdomTree Investments and Quebecor

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

By analyzing existing cross correlation between WisdomTree Investments and Quebecor, you can compare the effects of market volatilities on WisdomTree Investments and Quebecor 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 WisdomTree Investments with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Quebecor.

Diversification Opportunities for WisdomTree Investments and Quebecor

-0.71

Correlation Coefficient

WisdomTree Investments  Quebecor

Pay attention - limited upside

The 3 months correlation between WisdomTree and Quebecor is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and WisdomTree Investments 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 WisdomTree Investments are associated (or correlated) with Quebecor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quebecor has no effect on the direction of WisdomTree Investments i.e., WisdomTree Investments and Quebecor go up and down completely randomly.

Pair Corralation between WisdomTree Investments and Quebecor

Assuming the 90 days horizon WisdomTree Investments is expected to under-perform the Quebecor. In addition to that, WisdomTree Investments is 1.11 times more volatile than Quebecor. It trades about -0.29 of its total potential returns per unit of risk. Quebecor is currently generating about -0.26 per unit of volatility. If you would invest  2,240  in Quebecor on October 1, 2024 and sell it today you would lose (160.00) from holding Quebecor or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

WisdomTree Investments  vs.  Quebecor

WisdomTree Investments

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, WisdomTree Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Quebecor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quebecor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with WisdomTree Investments and Quebecor

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

The idea behind WisdomTree Investments and Quebecor 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.