Correlation Between Transcontinental and Quebecor
Can any of the company-specific risk be diversified away by investing in both Transcontinental 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 Transcontinental and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcontinental and Quebecor, you can compare the effects of market volatilities on Transcontinental 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 Transcontinental with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and Quebecor.
Diversification Opportunities for Transcontinental and Quebecor
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transcontinental and Quebecor is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Transcontinental 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 Transcontinental 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 Transcontinental i.e., Transcontinental and Quebecor go up and down completely randomly.
Pair Corralation between Transcontinental and Quebecor
Assuming the 90 days trading horizon Transcontinental is expected to generate 1.33 times more return on investment than Quebecor. However, Transcontinental is 1.33 times more volatile than Quebecor. It trades about 0.03 of its potential returns per unit of risk. Quebecor is currently generating about 0.02 per unit of risk. If you would invest 1,371 in Transcontinental on August 28, 2024 and sell it today you would earn a total of 318.00 from holding Transcontinental or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcontinental vs. Quebecor
Performance |
| Timeline |
| Transcontinental |
| Quebecor |
Transcontinental and Quebecor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcontinental and Quebecor
The main advantage of trading using opposite Transcontinental and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental 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.| Transcontinental vs. Cogeco Communications | Transcontinental vs. Quebecor | Transcontinental vs. CCL Industries | Transcontinental vs. Finning International |
| Quebecor vs. Cogeco Communications | Quebecor vs. Transcontinental | Quebecor vs. iA Financial | Quebecor vs. Saputo Inc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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