Correlation Between Olympia Financial and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Olympia 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 Olympia 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 Olympia Financial Group and Postmedia Network Canada, you can compare the effects of market volatilities on Olympia 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 Olympia Financial with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and Postmedia Network.
Diversification Opportunities for Olympia Financial and Postmedia Network
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Olympia and Postmedia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group 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 Olympia 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 Olympia Financial Group 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 Olympia Financial i.e., Olympia Financial and Postmedia Network go up and down completely randomly.
Pair Corralation between Olympia Financial and Postmedia Network
Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 0.35 times more return on investment than Postmedia Network. However, Olympia Financial Group is 2.86 times less risky than Postmedia Network. It trades about -0.04 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 10,346 in Olympia Financial Group on September 13, 2024 and sell it today you would lose (92.00) from holding Olympia Financial Group or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. Postmedia Network Canada
Performance |
| Timeline |
| Olympia Financial |
| Postmedia Network Canada |
Olympia Financial and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and Postmedia Network
The main advantage of trading using opposite Olympia Financial and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia 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.| Olympia Financial vs. Berkshire Hathaway CDR | Olympia Financial vs. E L Financial Corp | Olympia Financial vs. E L Financial 3 | Olympia Financial vs. Molson Coors Canada |
| Postmedia Network vs. TGS Esports | Postmedia Network vs. Osisko Metals | Postmedia Network vs. Lion One Metals | Postmedia Network vs. iSign Media Solutions |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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