Correlation Between HEMISPHERE EGY and Quebecor

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

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

Diversification Opportunities for HEMISPHERE EGY and Quebecor

0.15

Correlation Coefficient

HEMISPHERE EGY  Quebecor

Average diversification

The 3 months correlation between HEMISPHERE and Quebecor is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and HEMISPHERE EGY 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 HEMISPHERE EGY 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 HEMISPHERE EGY i.e., HEMISPHERE EGY and Quebecor go up and down completely randomly.

Pair Corralation between HEMISPHERE EGY and Quebecor

Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 1.35 times less return on investment than Quebecor. In addition to that, HEMISPHERE EGY is 1.67 times more volatile than Quebecor. It trades about 0.03 of its total potential returns per unit of risk. Quebecor is currently generating about 0.06 per unit of volatility. If you would invest  2,147  in Quebecor on September 14, 2024 and sell it today you would earn a total of  33.00  from holding Quebecor or generate 1.54% return on investment over 90 days.

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

HEMISPHERE EGY  vs.  Quebecor

HEMISPHERE EGY

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEMISPHERE EGY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, HEMISPHERE EGY may actually be approaching a critical reversion point that can send shares even higher in January 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 nearly stable basic indicators, Quebecor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HEMISPHERE EGY and Quebecor

The main advantage of trading using opposite HEMISPHERE EGY and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY 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 HEMISPHERE EGY 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..