Correlation Between Quebecor and BRP

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

By analyzing existing cross correlation between Quebecor and BRP Inc, you can compare the effects of market volatilities on Quebecor and BRP 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 BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and BRP.

Diversification Opportunities for Quebecor and BRP

0.51

Correlation Coefficient

Quebecor  BRP

Very weak diversification

The 3 months correlation between Quebecor and BRP is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Quebecor i.e., Quebecor and BRP go up and down completely randomly.

Pair Corralation between Quebecor and BRP

Assuming the 90 days trading horizon Quebecor is expected to under-perform the BRP. But the stock apears to be less risky and, when comparing its historical volatility, Quebecor is 1.95 times less risky than BRP. The stock trades about -0.31 of its potential returns per unit of risk. The BRP Inc is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  7,563  in BRP Inc on October 8, 2024 and sell it today you would lose (187.00) from holding BRP Inc or give up 2.47% of portfolio value over 90 days.

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

Quebecor  vs.  BRP Inc

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.

BRP Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRP Inc 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Quebecor and BRP

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

The idea behind Quebecor and BRP Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.