Correlation Between Quebecor and North West
Can any of the company-specific risk be diversified away by investing in both Quebecor and North West 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 North West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quebecor and North West, you can compare the effects of market volatilities on Quebecor and North West 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 North West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and North West.
Diversification Opportunities for Quebecor and North West
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quebecor and North is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and North West in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North West 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 North West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North West has no effect on the direction of Quebecor i.e., Quebecor and North West go up and down completely randomly.
Pair Corralation between Quebecor and North West
Assuming the 90 days trading horizon Quebecor is expected to under-perform the North West. But the stock apears to be less risky and, when comparing its historical volatility, Quebecor is 1.06 times less risky than North West. The stock trades about -0.02 of its potential returns per unit of risk. The North West is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,037 in North West on September 10, 2024 and sell it today you would earn a total of 218.00 from holding North West or generate 4.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Quebecor vs. North West
Performance |
Timeline |
Quebecor |
North West |
Quebecor and North West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quebecor and North West
The main advantage of trading using opposite Quebecor and North West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, North West 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 North West will offset losses from the drop in North West's long position.Quebecor vs. Cogeco Communications | Quebecor vs. Transcontinental | Quebecor vs. iA Financial | Quebecor vs. Saputo Inc |
North West vs. Empire Company Limited | North West vs. Transcontinental | North West vs. Premium Brands Holdings | North West vs. Exchange Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |