Correlation Between Constellation Brands and QXO,

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

By analyzing existing cross correlation between Constellation Brands Class and QXO, Inc, you can compare the effects of market volatilities on Constellation Brands and QXO, 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 Constellation Brands with a short position of QXO,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Brands and QXO,.

Diversification Opportunities for Constellation Brands and QXO,

0.79

Correlation Coefficient

Constellation Brands  QXO,

Poor diversification

The 3 months correlation between Constellation and QXO, is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Brands Class and QXO, Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QXO, Inc and Constellation Brands 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 Constellation Brands Class are associated (or correlated) with QXO,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QXO, Inc has no effect on the direction of Constellation Brands i.e., Constellation Brands and QXO, go up and down completely randomly.

Pair Corralation between Constellation Brands and QXO,

Considering the 90-day investment horizon Constellation Brands Class is expected to under-perform the QXO,. But the stock apears to be less risky and, when comparing its historical volatility, Constellation Brands Class is 1.07 times less risky than QXO,. The stock trades about -0.09 of its potential returns per unit of risk. The QXO, Inc is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,534  in QXO, Inc on December 29, 2024 and sell it today you would lose (158.00) from holding QXO, Inc or give up 10.3% of portfolio value over 90 days.

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

Constellation Brands Class  vs.  QXO, Inc

Constellation Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Constellation Brands Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

QXO, Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days QXO, Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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 Constellation Brands and QXO,

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

The idea behind Constellation Brands Class and QXO, 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 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.