Correlation Between Quebecor and Winpak
Can any of the company-specific risk be diversified away by investing in both Quebecor and Winpak 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 Winpak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quebecor and Winpak, you can compare the effects of market volatilities on Quebecor and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and Winpak.
Diversification Opportunities for Quebecor and Winpak
Very good diversification
The 3 months correlation between Quebecor and Winpak is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Quebecor i.e., Quebecor and Winpak go up and down completely randomly.
Pair Corralation between Quebecor and Winpak
Assuming the 90 days trading horizon Quebecor is expected to under-perform the Winpak. In addition to that, Quebecor is 1.32 times more volatile than Winpak. It trades about -0.12 of its total potential returns per unit of risk. Winpak is currently generating about -0.06 per unit of volatility. If you would invest 4,961 in Winpak on September 1, 2024 and sell it today you would lose (109.00) from holding Winpak or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quebecor vs. Winpak
Performance |
| Timeline |
| Quebecor |
| Winpak |
Quebecor and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quebecor and Winpak
The main advantage of trading using opposite Quebecor and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Quebecor vs. Arizona Metals Corp | Quebecor vs. Quipt Home Medical | Quebecor vs. Enduro Metals Corp | Quebecor vs. Perseus Mining |
| Winpak vs. Air Canada | Winpak vs. Wilmington Capital Management | Winpak vs. Altair Resources | Winpak vs. Dream Office Real |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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