Correlation Between North West and Quebecor
Can any of the company-specific risk be diversified away by investing in both North West 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 North West and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North West and Quebecor, you can compare the effects of market volatilities on North West 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 North West with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of North West and Quebecor.
Diversification Opportunities for North West and Quebecor
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Quebecor is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding North West and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and North West 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 North West 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 North West i.e., North West and Quebecor go up and down completely randomly.
Pair Corralation between North West and Quebecor
Assuming the 90 days trading horizon North West is expected to generate 1.04 times more return on investment than Quebecor. However, North West is 1.04 times more volatile than Quebecor. It trades about 0.07 of its potential returns per unit of risk. Quebecor is currently generating about -0.02 per unit of risk. If you would invest 5,031 in North West on September 6, 2024 and sell it today you would earn a total of 249.00 from holding North West or generate 4.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
North West vs. Quebecor
Performance |
Timeline |
North West |
Quebecor |
North West and Quebecor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North West and Quebecor
The main advantage of trading using opposite North West and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North West 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.North West vs. Empire Company Limited | North West vs. Transcontinental | North West vs. Premium Brands Holdings | North West vs. Exchange Income |
Quebecor vs. Cogeco Communications | Quebecor vs. Transcontinental | Quebecor vs. iA Financial | Quebecor vs. Saputo Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |