Correlation Between High Liner and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both High Liner 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 High Liner and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Postmedia Network Canada, you can compare the effects of market volatilities on High Liner 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 High Liner with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Postmedia Network.
Diversification Opportunities for High Liner and Postmedia Network
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between High and Postmedia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods 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 High Liner 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 High Liner Foods 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 High Liner i.e., High Liner and Postmedia Network go up and down completely randomly.
Pair Corralation between High Liner and Postmedia Network
Assuming the 90 days trading horizon High Liner is expected to generate 2.84 times less return on investment than Postmedia Network. But when comparing it to its historical volatility, High Liner Foods is 3.52 times less risky than Postmedia Network. It trades about 0.03 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Postmedia Network Canada on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Postmedia Network Canada or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Postmedia Network Canada
Performance |
| Timeline |
| High Liner Foods |
| Postmedia Network Canada |
High Liner and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Postmedia Network
The main advantage of trading using opposite High Liner and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner 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.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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