Correlation Between Goodfellow and Quebecor

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

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

Diversification Opportunities for Goodfellow and Quebecor

0.55

Correlation Coefficient

Goodfellow  Quebecor

Very weak diversification

The 3 months correlation between Goodfellow and Quebecor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Goodfellow and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Goodfellow 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 Goodfellow 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 Goodfellow i.e., Goodfellow and Quebecor go up and down completely randomly.

Pair Corralation between Goodfellow and Quebecor

Assuming the 90 days trading horizon Goodfellow is expected to generate 1.48 times less return on investment than Quebecor. But when comparing it to its historical volatility, Goodfellow is 1.3 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 of returns per unit of risk over similar time horizon. If you would invest  2,941  in Quebecor on October 4, 2024 and sell it today you would earn a total of  347.00  from holding Quebecor or generate 11.8% return on investment over 90 days.

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

Goodfellow  vs.  Quebecor

Goodfellow

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodfellow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm 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 comparatively stable basic indicators, Quebecor is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goodfellow and Quebecor

The main advantage of trading using opposite Goodfellow and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfellow 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 Goodfellow 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.