Correlation Between F PD and QVC

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

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

Diversification Opportunities for F PD and QVC

0.89

Correlation Coefficient

F PD  QVC

Very poor diversification

The 3 months correlation between F-PD and QVC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding F PD and QVC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QVC Group and F PD 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 F PD are associated (or correlated) with QVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QVC Group has no effect on the direction of F PD i.e., F PD and QVC go up and down completely randomly.

Pair Corralation between F PD and QVC

Given the investment horizon of 90 days F PD is expected to generate 0.09 times more return on investment than QVC. However, F PD is 11.35 times less risky than QVC. It trades about 0.05 of its potential returns per unit of risk. QVC Group is currently generating about -0.27 per unit of risk. If you would invest  2,120  in F PD on February 13, 2025 and sell it today you would earn a total of  16.00  from holding F PD or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

F PD  vs.  QVC Group

F PD

Risk-Adjusted Performance

Very Weak

Over the last 90 days F PD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Preferred Stock's basic indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

QVC Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days QVC Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with F PD and QVC

The main advantage of trading using opposite F PD and QVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F PD position performs unexpectedly, QVC 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 QVC will offset losses from the drop in QVC's long position.

The idea behind F PD and QVC Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.