Correlation Between Natural Health and Quebecor
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Quebecor, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Quebecor.
Diversification Opportunities for Natural Health and Quebecor
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natural and Quebecor is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and Quebecor go up and down completely randomly.
Pair Corralation between Natural Health and Quebecor
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the Quebecor. In addition to that, Natural Health is 1.89 times more volatile than Quebecor. It trades about -0.1 of its total potential returns per unit of risk. Quebecor is currently generating about 0.08 per unit of volatility. If you would invest 1,863 in Quebecor on September 22, 2024 and sell it today you would earn a total of 257.00 from holding Quebecor or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Quebecor
Performance |
| Timeline |
| Natural Health Trends |
| Quebecor |
Natural Health and Quebecor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Quebecor
The main advantage of trading using opposite Natural Health and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc | Natural Health vs. Apple Inc |
| Quebecor vs. MGIC INVESTMENT | Quebecor vs. Natural Health Trends | Quebecor vs. WisdomTree Investments | Quebecor vs. FEMALE HEALTH |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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