Correlation Between Element Fleet and Quebecor

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

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

Diversification Opportunities for Element Fleet and Quebecor

-0.01

Correlation Coefficient

Element Fleet  Quebecor

Good diversification

The 3 months correlation between Element and Quebecor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Quebecor go up and down completely randomly.

Pair Corralation between Element Fleet and Quebecor

Assuming the 90 days trading horizon Element Fleet Management is expected to under-perform the Quebecor. But the stock apears to be less risky and, when comparing its historical volatility, Element Fleet Management is 4.1 times less risky than Quebecor. The stock trades about -0.13 of its potential returns per unit of risk. The Quebecor is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,199  in Quebecor on September 28, 2024 and sell it today you would lose (93.00) from holding Quebecor or give up 2.91% of portfolio value over 90 days.

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

Element Fleet Management  vs.  Quebecor

Element Fleet Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Element Fleet is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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 Element Fleet and Quebecor

The main advantage of trading using opposite Element Fleet and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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 Element Fleet Management 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.