Correlation Between Quebecor and TC Energy

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

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

Diversification Opportunities for Quebecor and TC Energy

-0.59

Correlation Coefficient

Quebecor  TC Energy

Excellent diversification

The 3 months correlation between Quebecor and TRP-PA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy Corp and Quebecor 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 Quebecor are associated (or correlated) with TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of Quebecor i.e., Quebecor and TC Energy go up and down completely randomly.

Pair Corralation between Quebecor and TC Energy

Assuming the 90 days trading horizon Quebecor is expected to generate 4.75 times more return on investment than TC Energy. However, Quebecor is 4.75 times more volatile than TC Energy Corp. It trades about 0.02 of its potential returns per unit of risk. TC Energy Corp is currently generating about -0.07 per unit of risk. If you would invest  3,199  in Quebecor on September 29, 2024 and sell it today you would earn a total of  1.00  from holding Quebecor or generate 0.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Quebecor  vs.  TC Energy Corp

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 unfluctuating 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.

TC Energy Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TC Energy Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TC Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quebecor and TC Energy

The main advantage of trading using opposite Quebecor and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.

The idea behind Quebecor and TC Energy Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..