Correlation Between European Residential and Quebecor
Can any of the company-specific risk be diversified away by investing in both European Residential and Quebecor 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 European Residential and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Residential Real and Quebecor, you can compare the effects of market volatilities on European Residential and Quebecor 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 European Residential with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Residential and Quebecor.
Diversification Opportunities for European Residential and Quebecor
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Quebecor is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and European Residential 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 European Residential Real are associated (or correlated) with Quebecor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quebecor has no effect on the direction of European Residential i.e., European Residential and Quebecor go up and down completely randomly.
Pair Corralation between European Residential and Quebecor
Assuming the 90 days trading horizon European Residential Real is expected to under-perform the Quebecor. In addition to that, European Residential is 4.24 times more volatile than Quebecor. It trades about -0.19 of its total potential returns per unit of risk. Quebecor is currently generating about -0.01 per unit of volatility. If you would invest 3,221 in Quebecor on October 15, 2024 and sell it today you would lose (28.00) from holding Quebecor or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Residential Real vs. Quebecor
Performance |
| Timeline |
| European Residential Real |
| Quebecor |
European Residential and Quebecor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Residential and Quebecor
The main advantage of trading using opposite European Residential and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential position performs unexpectedly, Quebecor 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 Quebecor will offset losses from the drop in Quebecor's long position.| European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
| Quebecor vs. CVS HEALTH CDR | Quebecor vs. Quipt Home Medical | Quebecor vs. Jamieson Wellness | Quebecor vs. NeXGold Mining Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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