Correlation Between Pace Metals and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Pace Metals 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 Pace Metals and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Metals and Postmedia Network Canada, you can compare the effects of market volatilities on Pace Metals 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 Pace Metals with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Metals and Postmedia Network.
Diversification Opportunities for Pace Metals and Postmedia Network
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pace and Postmedia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pace Metals 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 Pace Metals 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 Pace Metals 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 Pace Metals i.e., Pace Metals and Postmedia Network go up and down completely randomly.
Pair Corralation between Pace Metals and Postmedia Network
Assuming the 90 days trading horizon Pace Metals is expected to generate 3.93 times more return on investment than Postmedia Network. However, Pace Metals is 3.93 times more volatile than Postmedia Network Canada. It trades about 0.05 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about 0.01 per unit of risk. If you would invest 225.00 in Pace Metals on November 6, 2024 and sell it today you would lose (209.00) from holding Pace Metals or give up 92.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pace Metals vs. Postmedia Network Canada
Performance |
| Timeline |
| Pace Metals |
| Postmedia Network Canada |
Pace Metals and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Metals and Postmedia Network
The main advantage of trading using opposite Pace Metals and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Metals 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.| Pace Metals vs. Information Services | Pace Metals vs. T2 Metals Corp | Pace Metals vs. Quorum Information Technologies | Pace Metals vs. Advent Wireless |
| Postmedia Network vs. Magna Mining | Postmedia Network vs. Computer Modelling Group | Postmedia Network vs. Questor Technology | Postmedia Network vs. Converge Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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