Correlation Between BOEING CDR and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both BOEING CDR 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 BOEING CDR and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOEING CDR and Postmedia Network Canada, you can compare the effects of market volatilities on BOEING CDR 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 BOEING CDR with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOEING CDR and Postmedia Network.
Diversification Opportunities for BOEING CDR and Postmedia Network
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOEING and Postmedia is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BOEING CDR 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 BOEING CDR 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 BOEING CDR 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 BOEING CDR i.e., BOEING CDR and Postmedia Network go up and down completely randomly.
Pair Corralation between BOEING CDR and Postmedia Network
Assuming the 90 days trading horizon BOEING CDR is expected to under-perform the Postmedia Network. But the stock apears to be less risky and, when comparing its historical volatility, BOEING CDR is 1.7 times less risky than Postmedia Network. The stock trades about -0.07 of its potential returns per unit of risk. The Postmedia Network Canada is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 132.00 in Postmedia Network Canada on August 28, 2024 and sell it today you would lose (10.00) from holding Postmedia Network Canada or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOEING CDR vs. Postmedia Network Canada
Performance |
| Timeline |
| BOEING CDR |
| Postmedia Network Canada |
BOEING CDR and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOEING CDR and Postmedia Network
The main advantage of trading using opposite BOEING CDR and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOEING CDR 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.| BOEING CDR vs. CI Financial Corp | BOEING CDR vs. Laurentian Bank | BOEING CDR vs. Arbor Metals Corp | BOEING CDR vs. Canadian Imperial Bank |
| Postmedia Network vs. Genesis Land Development | Postmedia Network vs. ADF Group | Postmedia Network vs. Madison Pacific Properties | Postmedia Network vs. Goodfellow |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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