Correlation Between Quad Graphics and SP Global
Can any of the company-specific risk be diversified away by investing in both Quad Graphics and SP Global 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 SP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quad Graphics and SP Global, you can compare the effects of market volatilities on Quad Graphics and SP Global 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 SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quad Graphics and SP Global.
Diversification Opportunities for Quad Graphics and SP Global
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Quad and SPGI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Quad Graphics and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Quad Graphics i.e., Quad Graphics and SP Global go up and down completely randomly.
Pair Corralation between Quad Graphics and SP Global
Given the investment horizon of 90 days Quad Graphics is expected to under-perform the SP Global. In addition to that, Quad Graphics is 4.05 times more volatile than SP Global. It trades about -0.07 of its total potential returns per unit of risk. SP Global is currently generating about -0.13 per unit of volatility. If you would invest 43,341 in SP Global on January 26, 2024 and sell it today you would lose (2,013) from holding SP Global or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quad Graphics vs. SP Global
Performance |
| Timeline |
| Quad Graphics |
| SP Global |
Quad Graphics and SP Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quad Graphics and SP Global
The main advantage of trading using opposite Quad Graphics and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quad Graphics position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global's long position.| Quad Graphics vs. Discount Print USA | Quad Graphics vs. Cass Information Systems | Quad Graphics vs. Civeo Corp | Quad Graphics vs. Network 1 Technologies |
| SP Global vs. Dun Bradstreet Holdings | SP Global vs. Intercontinental Exchange | SP Global vs. Nasdaq Inc | SP Global vs. CME Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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