Correlation Between AKITA Drilling and Quebecor

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

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

Diversification Opportunities for AKITA Drilling and Quebecor

-0.38

Correlation Coefficient

AKITA Drilling  Quebecor

Very good diversification

The 3 months correlation between AKITA and Quebecor is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and Quebecor go up and down completely randomly.

Pair Corralation between AKITA Drilling and Quebecor

Assuming the 90 days trading horizon AKITA Drilling is expected to generate 0.26 times more return on investment than Quebecor. However, AKITA Drilling is 3.9 times less risky than Quebecor. It trades about -0.02 of its potential returns per unit of risk. Quebecor is currently generating about -0.02 per unit of risk. If you would invest  160.00  in AKITA Drilling on September 28, 2024 and sell it today you would lose (1.00) from holding AKITA Drilling or give up 0.62% of portfolio value over 90 days.

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

AKITA Drilling  vs.  Quebecor

AKITA Drilling

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AKITA Drilling may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AKITA Drilling and Quebecor

The main advantage of trading using opposite AKITA Drilling and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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 AKITA Drilling 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.