Correlation Between Sun Peak and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Sun Peak 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 Sun Peak and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Peak Metals and Postmedia Network Canada, you can compare the effects of market volatilities on Sun Peak 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 Sun Peak with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Peak and Postmedia Network.
Diversification Opportunities for Sun Peak and Postmedia Network
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Postmedia is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sun Peak 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 Sun Peak 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 Sun Peak 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 Sun Peak i.e., Sun Peak and Postmedia Network go up and down completely randomly.
Pair Corralation between Sun Peak and Postmedia Network
Assuming the 90 days trading horizon Sun Peak Metals is expected to generate 0.96 times more return on investment than Postmedia Network. However, Sun Peak Metals is 1.04 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 -0.04 per unit of risk. If you would invest 33.00 in Sun Peak Metals on November 7, 2024 and sell it today you would lose (2.00) from holding Sun Peak Metals or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Peak Metals vs. Postmedia Network Canada
Performance |
| Timeline |
| Sun Peak Metals |
| Postmedia Network Canada |
Sun Peak and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Peak and Postmedia Network
The main advantage of trading using opposite Sun Peak and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Peak 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.| Sun Peak vs. Verizon Communications CDR | Sun Peak vs. First National Financial | Sun Peak vs. Quorum Information Technologies | Sun Peak vs. Definity Financial Corp |
| Postmedia Network vs. Definity Financial Corp | Postmedia Network vs. Nova Leap Health | Postmedia Network vs. Andlauer Healthcare Gr | Postmedia Network vs. CI Financial Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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