Correlation Between NeXGold Mining and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both NeXGold Mining 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 NeXGold Mining and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeXGold Mining Corp and Postmedia Network Canada, you can compare the effects of market volatilities on NeXGold Mining 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 NeXGold Mining with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Postmedia Network.
Diversification Opportunities for NeXGold Mining and Postmedia Network
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between NeXGold and Postmedia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp 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 NeXGold Mining 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 NeXGold Mining Corp 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 NeXGold Mining i.e., NeXGold Mining and Postmedia Network go up and down completely randomly.
Pair Corralation between NeXGold Mining and Postmedia Network
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Postmedia Network. In addition to that, NeXGold Mining is 2.34 times more volatile than Postmedia Network Canada. It trades about -0.34 of its total potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.29 per unit of volatility. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Postmedia Network Canada
Performance |
| Timeline |
| NeXGold Mining Corp |
| Postmedia Network Canada |
NeXGold Mining and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Postmedia Network
The main advantage of trading using opposite NeXGold Mining and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold Mining 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.| NeXGold Mining vs. Bip Investment Corp | NeXGold Mining vs. Economic Investment Trust | NeXGold Mining vs. Faction Investment Group | NeXGold Mining vs. Plaza Retail REIT |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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