Correlation Between Goeasy and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Goeasy 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 Goeasy and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between goeasy and Postmedia Network Canada, you can compare the effects of market volatilities on Goeasy 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 Goeasy with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goeasy and Postmedia Network.
Diversification Opportunities for Goeasy and Postmedia Network
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goeasy and Postmedia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding goeasy 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 Goeasy 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 goeasy 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 Goeasy i.e., Goeasy and Postmedia Network go up and down completely randomly.
Pair Corralation between Goeasy and Postmedia Network
Assuming the 90 days trading horizon goeasy is expected to generate 0.39 times more return on investment than Postmedia Network. However, goeasy is 2.59 times less risky than Postmedia Network. It trades about 0.07 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.03 per unit of risk. If you would invest 17,026 in goeasy on November 3, 2024 and sell it today you would earn a total of 667.00 from holding goeasy or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
goeasy vs. Postmedia Network Canada
Performance |
| Timeline |
| goeasy |
| Postmedia Network Canada |
Goeasy and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goeasy and Postmedia Network
The main advantage of trading using opposite Goeasy and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goeasy 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.| Goeasy vs. InPlay Oil Corp | Goeasy vs. A W FOOD | Goeasy vs. Upstart Investments | Goeasy vs. Brookfield Investments |
| Postmedia Network vs. Vizsla Silver Corp | Postmedia Network vs. Constellation Software | Postmedia Network vs. Arizona Gold Silver | Postmedia Network vs. Monument Mining Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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