Correlation Between Quad Graphics and Sirius XM

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

Diversification Opportunities for Quad Graphics and Sirius XM

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Quad and Sirius is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Quad Graphics and Sirius XM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirius XM Holding and Quad Graphics 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 Quad Graphics are associated (or correlated) with Sirius XM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirius XM Holding has no effect on the direction of Quad Graphics i.e., Quad Graphics and Sirius XM go up and down completely randomly.

Pair Corralation between Quad Graphics and Sirius XM

Given the investment horizon of 90 days Quad Graphics is expected to generate 1.29 times more return on investment than Sirius XM. However, Quad Graphics is 1.29 times more volatile than Sirius XM Holding. It trades about 0.01 of its potential returns per unit of risk. Sirius XM Holding is currently generating about -0.02 per unit of risk. If you would invest  658.00  in Quad Graphics on December 30, 2023 and sell it today you would lose (127.00) from holding Quad Graphics or give up 19.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Quad Graphics  vs.  Sirius XM Holding

 Performance 
       Timeline  
Quad Graphics 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Quad Graphics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Quad Graphics is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Sirius XM Holding 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sirius XM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Quad Graphics and Sirius XM Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Quad Graphics and Sirius XM

The main advantage of trading using opposite Quad Graphics and Sirius XM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quad Graphics position performs unexpectedly, Sirius XM 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 Sirius XM will offset losses from the drop in Sirius XM's long position.
The idea behind Quad Graphics and Sirius XM Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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