Correlation Between Economic Investment and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Economic Investment 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 Economic Investment and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Postmedia Network Canada, you can compare the effects of market volatilities on Economic Investment 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 Economic Investment with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Postmedia Network.
Diversification Opportunities for Economic Investment and Postmedia Network
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Economic and Postmedia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust 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 Economic Investment 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 Economic Investment Trust 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 Economic Investment i.e., Economic Investment and Postmedia Network go up and down completely randomly.
Pair Corralation between Economic Investment and Postmedia Network
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.28 times more return on investment than Postmedia Network. However, Economic Investment Trust is 3.51 times less risky than Postmedia Network. It trades about 0.11 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 12,818 in Economic Investment Trust on September 20, 2024 and sell it today you would earn a total of 3,582 from holding Economic Investment Trust or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Postmedia Network Canada
Performance |
| Timeline |
| Economic Investment Trust |
| Postmedia Network Canada |
Economic Investment and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Postmedia Network
The main advantage of trading using opposite Economic Investment and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment 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.| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
| Postmedia Network vs. Genesis Land Development | Postmedia Network vs. Madison Pacific Properties | Postmedia Network vs. Goodfellow | Postmedia Network vs. Helix BioPharma Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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