Correlation Between USU Software and Quebecor

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

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

Diversification Opportunities for USU Software and Quebecor

0.59

Correlation Coefficient

USU Software  Quebecor

Very weak diversification

The 3 months correlation between USU and Quebecor is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding USU Software AG and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and USU Software 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 USU Software AG 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 USU Software i.e., USU Software and Quebecor go up and down completely randomly.

Pair Corralation between USU Software and Quebecor

Assuming the 90 days trading horizon USU Software is expected to generate 2.22 times less return on investment than Quebecor. In addition to that, USU Software is 1.16 times more volatile than Quebecor. It trades about 0.07 of its total potential returns per unit of risk. Quebecor is currently generating about 0.17 per unit of volatility. If you would invest  2,060  in Quebecor on December 29, 2024 and sell it today you would earn a total of  260.00  from holding Quebecor or generate 12.62% return on investment over 90 days.

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

USU Software AG  vs.  Quebecor

USU Software AG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in USU Software AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, USU Software is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Quebecor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quebecor are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Quebecor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with USU Software and Quebecor

The main advantage of trading using opposite USU Software and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USU Software 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 USU Software AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.