Correlation Between Faction Investment and Quebecor

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

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

Diversification Opportunities for Faction Investment and Quebecor

0.0

Correlation Coefficient

Faction Investment  Quebecor

Pay attention - limited upside

The 3 months correlation between Faction and Quebecor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Faction Investment 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 Faction Investment Group 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 Faction Investment i.e., Faction Investment and Quebecor go up and down completely randomly.

Pair Corralation between Faction Investment and Quebecor

Assuming the 90 days trading horizon Faction Investment Group is expected to generate 10.43 times more return on investment than Quebecor. However, Faction Investment is 10.43 times more volatile than Quebecor. It trades about 0.13 of its potential returns per unit of risk. Quebecor is currently generating about -0.02 per unit of risk. If you would invest  1.50  in Faction Investment Group on October 8, 2024 and sell it today you would earn a total of  3.50  from holding Faction Investment Group or generate 233.33% return on investment over 90 days.

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

Faction Investment Group  vs.  Quebecor

Faction Investment

Risk-Adjusted Performance

10 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Faction Investment Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Faction Investment sustained 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. In spite of comparatively stable basic indicators, Quebecor is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Faction Investment and Quebecor

The main advantage of trading using opposite Faction Investment and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faction Investment 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 Faction Investment Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.