Correlation Between Quebecor and Celestica
Can any of the company-specific risk be diversified away by investing in both Quebecor and Celestica 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 Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quebecor and Celestica, you can compare the effects of market volatilities on Quebecor and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and Celestica.
Diversification Opportunities for Quebecor and Celestica
Excellent diversification
The 3 months correlation between Quebecor and Celestica is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Quebecor i.e., Quebecor and Celestica go up and down completely randomly.
Pair Corralation between Quebecor and Celestica
Assuming the 90 days trading horizon Quebecor is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, Quebecor is 1.1 times less risky than Celestica. The stock trades about -0.02 of its potential returns per unit of risk. The Celestica is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 14,029 in Celestica on October 23, 2024 and sell it today you would earn a total of 2,412 from holding Celestica or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quebecor vs. Celestica
Performance |
| Timeline |
| Quebecor |
| Celestica |
Quebecor and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quebecor and Celestica
The main advantage of trading using opposite Quebecor and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.| Quebecor vs. Ramp Metals | Quebecor vs. Nicola Mining | Quebecor vs. Economic Investment Trust | Quebecor vs. Forsys Metals Corp |
| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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