Correlation Between MAG Silver and Quebecor

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

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

Diversification Opportunities for MAG Silver and Quebecor

0.13

Correlation Coefficient

MAG Silver  Quebecor

Average diversification

The 3 months correlation between MAG and Quebecor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and MAG Silver 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 MAG Silver Corp 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 MAG Silver i.e., MAG Silver and Quebecor go up and down completely randomly.

Pair Corralation between MAG Silver and Quebecor

Assuming the 90 days trading horizon MAG Silver is expected to generate 3.51 times less return on investment than Quebecor. In addition to that, MAG Silver is 1.05 times more volatile than Quebecor. It trades about 0.01 of its total potential returns per unit of risk. Quebecor is currently generating about 0.02 per unit of volatility. If you would invest  2,846  in Quebecor on September 26, 2024 and sell it today you would earn a total of  260.00  from holding Quebecor or generate 9.14% return on investment over 90 days.

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

MAG Silver Corp  vs.  Quebecor

MAG Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, MAG Silver is not utilizing all of its potentials. The current 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 abnormal 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 MAG Silver and Quebecor

The main advantage of trading using opposite MAG Silver and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver 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 MAG Silver Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.