Correlation Between Grupo Media and Quebecor

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

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

Diversification Opportunities for Grupo Media and Quebecor

-0.63

Correlation Coefficient

Grupo Media  Quebecor

Excellent diversification

The 3 months correlation between Grupo and Quebecor is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Media Capital and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Grupo Media 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 Grupo Media Capital 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 Grupo Media i.e., Grupo Media and Quebecor go up and down completely randomly.

Pair Corralation between Grupo Media and Quebecor

Assuming the 90 days trading horizon Grupo Media Capital is expected to under-perform the Quebecor. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Media Capital is 2.17 times less risky than Quebecor. The stock trades about -0.01 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  1,938  in Quebecor on October 8, 2024 and sell it today you would earn a total of  182.00  from holding Quebecor or generate 9.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Grupo Media Capital  vs.  Quebecor

Grupo Media Capital

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Grupo Media Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, Grupo Media may actually be approaching a critical reversion point that can send shares even higher in February 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. 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 Grupo Media and Quebecor

The main advantage of trading using opposite Grupo Media and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Media 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 Grupo Media Capital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.