Correlation Between Quebecor and True North
Can any of the company-specific risk be diversified away by investing in both Quebecor and True North 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 True North into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quebecor and True North Commercial, you can compare the effects of market volatilities on Quebecor and True North 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 True North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and True North.
Diversification Opportunities for Quebecor and True North
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quebecor and True is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and True North Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True North Commercial 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 True North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True North Commercial has no effect on the direction of Quebecor i.e., Quebecor and True North go up and down completely randomly.
Pair Corralation between Quebecor and True North
Assuming the 90 days trading horizon Quebecor is expected to under-perform the True North. But the stock apears to be less risky and, when comparing its historical volatility, Quebecor is 1.48 times less risky than True North. The stock trades about -0.22 of its potential returns per unit of risk. The True North Commercial is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,231 in True North Commercial on August 29, 2024 and sell it today you would lose (110.00) from holding True North Commercial or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quebecor vs. True North Commercial
Performance |
| Timeline |
| Quebecor |
| True North Commercial |
Quebecor and True North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quebecor and True North
The main advantage of trading using opposite Quebecor and True North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, True North 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 True North will offset losses from the drop in True North's long position.| Quebecor vs. Royal Helium | Quebecor vs. Excelsior Mining Corp | Quebecor vs. Vista Gold | Quebecor vs. TeraGo Inc |
| True North vs. Slate Office REIT | True North vs. Inovalis Real Estate | True North vs. BTB Real Estate | True North vs. Slate Grocery REIT |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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