Correlation Between Globalstar and Quebecor

Can any of the company-specific risk be diversified away by investing in both Globalstar 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 Globalstar and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globalstar and Quebecor, you can compare the effects of market volatilities on Globalstar 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 Globalstar with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalstar and Quebecor.

Diversification Opportunities for Globalstar and Quebecor

-0.54

Correlation Coefficient

Globalstar  Quebecor

Excellent diversification

The 3 months correlation between Globalstar and Quebecor is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Globalstar and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Globalstar 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 Globalstar 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 Globalstar i.e., Globalstar and Quebecor go up and down completely randomly.

Pair Corralation between Globalstar and Quebecor

If you would invest  107.00  in Globalstar on September 29, 2024 and sell it today you would earn a total of  108.00  from holding Globalstar or generate 100.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

Globalstar  vs.  Quebecor

Globalstar

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globalstar are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Globalstar unveiled solid returns over the last few months and may actually be approaching a breakup point.

Quebecor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quebecor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Quebecor is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Globalstar and Quebecor

The main advantage of trading using opposite Globalstar and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalstar 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.

The idea behind Globalstar and Quebecor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.