Correlation Between Postmedia Network and First Majestic
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and First Majestic 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 Postmedia Network and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postmedia Network Canada and First Majestic Silver, you can compare the effects of market volatilities on Postmedia Network and First Majestic 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 Postmedia Network with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and First Majestic.
Diversification Opportunities for Postmedia Network and First Majestic
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Postmedia and First is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and Postmedia Network 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 Postmedia Network Canada are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Postmedia Network i.e., Postmedia Network and First Majestic go up and down completely randomly.
Pair Corralation between Postmedia Network and First Majestic
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the First Majestic. In addition to that, Postmedia Network is 1.56 times more volatile than First Majestic Silver. It trades about -0.04 of its total potential returns per unit of risk. First Majestic Silver is currently generating about 0.01 per unit of volatility. If you would invest 831.00 in First Majestic Silver on November 6, 2024 and sell it today you would lose (3.00) from holding First Majestic Silver or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Postmedia Network Canada vs. First Majestic Silver
Performance |
| Timeline |
| Postmedia Network Canada |
| First Majestic Silver |
Postmedia Network and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and First Majestic
The main advantage of trading using opposite Postmedia Network and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Postmedia Network vs. Definity Financial Corp | Postmedia Network vs. Nova Leap Health | Postmedia Network vs. Andlauer Healthcare Gr | Postmedia Network vs. CI Financial Corp |
| First Majestic vs. Computer Modelling Group | First Majestic vs. Canaf Investments | First Majestic vs. Highwood Asset Management | First Majestic vs. Westshore Terminals Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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