Correlation Between Finning International and Quebecor
Can any of the company-specific risk be diversified away by investing in both Finning International 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 Finning International and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finning International and Quebecor, you can compare the effects of market volatilities on Finning International 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 Finning International with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finning International and Quebecor.
Diversification Opportunities for Finning International and Quebecor
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finning and Quebecor is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Finning International and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Finning International 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 Finning International 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 Finning International i.e., Finning International and Quebecor go up and down completely randomly.
Pair Corralation between Finning International and Quebecor
Assuming the 90 days trading horizon Finning International is expected to under-perform the Quebecor. In addition to that, Finning International is 1.84 times more volatile than Quebecor. It trades about -0.21 of its total potential returns per unit of risk. Quebecor is currently generating about -0.31 per unit of volatility. If you would invest 3,492 in Quebecor on August 24, 2024 and sell it today you would lose (297.00) from holding Quebecor or give up 8.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finning International vs. Quebecor
Performance |
| Timeline |
| Finning International |
| Quebecor |
Finning International and Quebecor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finning International and Quebecor
The main advantage of trading using opposite Finning International and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finning International 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.| Finning International vs. Toromont Industries | Finning International vs. Ritchie Bros Auctioneers | Finning International vs. Stantec | Finning International vs. Transcontinental |
| Quebecor vs. Cogeco Communications | Quebecor vs. Transcontinental | Quebecor vs. iA Financial | Quebecor vs. Saputo Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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