Correlation Between Income Financial and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Income Financial 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 Income Financial and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Financial Trust and Postmedia Network Canada, you can compare the effects of market volatilities on Income Financial 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 Income Financial with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Financial and Postmedia Network.
Diversification Opportunities for Income Financial and Postmedia Network
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Income and Postmedia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Income Financial 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 Income Financial 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 Income Financial 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 Income Financial i.e., Income Financial and Postmedia Network go up and down completely randomly.
Pair Corralation between Income Financial and Postmedia Network
Assuming the 90 days trading horizon Income Financial Trust is expected to generate 0.53 times more return on investment than Postmedia Network. However, Income Financial Trust is 1.87 times less risky than Postmedia Network. It trades about 0.05 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.23 per unit of risk. If you would invest 860.00 in Income Financial Trust on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Income Financial Trust or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Financial Trust vs. Postmedia Network Canada
Performance |
| Timeline |
| Income Financial Trust |
| Postmedia Network Canada |
Income Financial and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Financial and Postmedia Network
The main advantage of trading using opposite Income Financial and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Financial 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.| Income Financial vs. Dividend Select 15 | Income Financial vs. Global Dividend Growth | Income Financial vs. Brompton Split Banc | Income Financial vs. Real Estate E Commerce |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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