Correlation Between AKITA Drilling and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Postmedia Network 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 AKITA Drilling and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Postmedia Network Canada, you can compare the effects of market volatilities on AKITA Drilling and Postmedia Network 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 AKITA Drilling with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Postmedia Network.
Diversification Opportunities for AKITA Drilling and Postmedia Network
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and Postmedia is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Postmedia Network Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postmedia Network Canada and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Postmedia Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postmedia Network Canada has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Postmedia Network go up and down completely randomly.
Pair Corralation between AKITA Drilling and Postmedia Network
Assuming the 90 days trading horizon AKITA Drilling is expected to generate 0.49 times more return on investment than Postmedia Network. However, AKITA Drilling is 2.06 times less risky than Postmedia Network. It trades about 0.02 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about 0.01 per unit of risk. If you would invest 155.00 in AKITA Drilling on September 12, 2024 and sell it today you would earn a total of 10.00 from holding AKITA Drilling or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Postmedia Network Canada
Performance |
| Timeline |
| AKITA Drilling |
| Postmedia Network Canada |
AKITA Drilling and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Postmedia Network
The main advantage of trading using opposite AKITA Drilling and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Postmedia Network 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 Postmedia Network will offset losses from the drop in Postmedia Network's long position.| AKITA Drilling vs. Enbridge Pref 5 | AKITA Drilling vs. Enbridge Pref 11 | AKITA Drilling vs. Enbridge Pref L | AKITA Drilling vs. E Split Corp |
| Postmedia Network vs. Boat Rocker Media | Postmedia Network vs. AKITA Drilling | Postmedia Network vs. Royal Bank of | Postmedia Network vs. Olympia Financial 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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