Correlation Between Galaxy Digital and Quebecor

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Can any of the company-specific risk be diversified away by investing in both Galaxy Digital 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 Galaxy Digital and Quebecor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Digital Holdings and Quebecor, you can compare the effects of market volatilities on Galaxy Digital 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 Galaxy Digital with a short position of Quebecor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Digital and Quebecor.

Diversification Opportunities for Galaxy Digital and Quebecor

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Galaxy and Quebecor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Digital Holdings and Quebecor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebecor and Galaxy Digital 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 Galaxy Digital Holdings 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 Galaxy Digital i.e., Galaxy Digital and Quebecor go up and down completely randomly.

Pair Corralation between Galaxy Digital and Quebecor

Assuming the 90 days trading horizon Galaxy Digital Holdings is expected to generate 3.76 times more return on investment than Quebecor. However, Galaxy Digital is 3.76 times more volatile than Quebecor. It trades about 0.01 of its potential returns per unit of risk. Quebecor is currently generating about -0.18 per unit of risk. If you would invest  1,379  in Galaxy Digital Holdings on February 5, 2024 and sell it today you would lose (56.00) from holding Galaxy Digital Holdings or give up 4.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.67%
ValuesDaily Returns

Galaxy Digital Holdings  vs.  Quebecor

 Performance 
       Timeline  
Galaxy Digital Holdings 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Galaxy Digital Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Galaxy Digital displayed solid returns over the last few months and may actually be approaching a breakup point.
Quebecor 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Quebecor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Galaxy Digital and Quebecor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Galaxy Digital and Quebecor

The main advantage of trading using opposite Galaxy Digital and Quebecor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Digital 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 Galaxy Digital Holdings 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.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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