Correlation Between Quad Graphics and Sirius XM
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Quad Graphics vs. Sirius XM Holding
Performance |
Timeline |
Quad Graphics |
Sirius XM Holding |
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.Quad Graphics vs. BrightView Holdings | Quad Graphics vs. SP Plus Corp | Quad Graphics vs. Target Hospitality Corp | Quad Graphics vs. DLH Holdings Corp |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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