Correlation Between Quebecor and S A P

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

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

Diversification Opportunities for Quebecor and S A P

0.6

Correlation Coefficient

Quebecor  S A P

Poor diversification

The 3 months correlation between Quebecor and SAP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of Quebecor i.e., Quebecor and S A P go up and down completely randomly.

Pair Corralation between Quebecor and S A P

Assuming the 90 days trading horizon Quebecor is expected to generate 0.82 times more return on investment than S A P. However, Quebecor is 1.22 times less risky than S A P. It trades about 0.22 of its potential returns per unit of risk. Saputo Inc is currently generating about 0.0 per unit of risk. If you would invest  3,102  in Quebecor on December 30, 2024 and sell it today you would earn a total of  529.00  from holding Quebecor or generate 17.05% return on investment over 90 days.

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

Quebecor  vs.  Saputo Inc

Quebecor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quebecor are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Quebecor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Saputo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saputo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, S A P is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Quebecor and S A P

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

The idea behind Quebecor and Saputo 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.