Correlation Between Quebecor and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Quebecor and CCL Industries 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 CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quebecor and CCL Industries, you can compare the effects of market volatilities on Quebecor and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quebecor and CCL Industries.
Diversification Opportunities for Quebecor and CCL Industries
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quebecor and CCL is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Quebecor and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Quebecor i.e., Quebecor and CCL Industries go up and down completely randomly.
Pair Corralation between Quebecor and CCL Industries
Assuming the 90 days trading horizon Quebecor is expected to under-perform the CCL Industries. But the stock apears to be less risky and, when comparing its historical volatility, Quebecor is 1.15 times less risky than CCL Industries. The stock trades about -0.31 of its potential returns per unit of risk. The CCL Industries is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 8,232 in CCL Industries on August 24, 2024 and sell it today you would lose (464.00) from holding CCL Industries or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quebecor vs. CCL Industries
Performance |
| Timeline |
| Quebecor |
| CCL Industries |
Quebecor and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quebecor and CCL Industries
The main advantage of trading using opposite Quebecor and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quebecor position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Quebecor vs. Cogeco Communications | Quebecor vs. Transcontinental | Quebecor vs. iA Financial | Quebecor vs. Saputo Inc |
| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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