Correlation Between BCE and Transcontinental
Can any of the company-specific risk be diversified away by investing in both BCE and Transcontinental 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 BCE and Transcontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc Pref and Transcontinental, you can compare the effects of market volatilities on BCE and Transcontinental 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 BCE with a short position of Transcontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Transcontinental.
Diversification Opportunities for BCE and Transcontinental
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BCE and Transcontinental is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc Pref and Transcontinental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental and BCE 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 BCE Inc Pref are associated (or correlated) with Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental has no effect on the direction of BCE i.e., BCE and Transcontinental go up and down completely randomly.
Pair Corralation between BCE and Transcontinental
Assuming the 90 days trading horizon BCE Inc Pref is expected to generate 0.61 times more return on investment than Transcontinental. However, BCE Inc Pref is 1.64 times less risky than Transcontinental. It trades about 0.1 of its potential returns per unit of risk. Transcontinental is currently generating about -0.09 per unit of risk. If you would invest 1,833 in BCE Inc Pref on July 16, 2025 and sell it today you would earn a total of 62.00 from holding BCE Inc Pref or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc Pref vs. Transcontinental
Performance |
| Timeline |
| BCE Inc Pref |
| Transcontinental |
BCE and Transcontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Transcontinental
The main advantage of trading using opposite BCE and Transcontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, Transcontinental 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 Transcontinental will offset losses from the drop in Transcontinental's long position.The idea behind BCE Inc Pref and Transcontinental 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.| Transcontinental vs. Cogeco Communications | Transcontinental vs. Quebecor | Transcontinental vs. CCL Industries | Transcontinental vs. Finning International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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