Correlation Between Postmedia Network and Dream Office
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Dream Office 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 Dream Office 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 Dream Office Real, you can compare the effects of market volatilities on Postmedia Network and Dream Office 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 Dream Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Dream Office.
Diversification Opportunities for Postmedia Network and Dream Office
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Postmedia and Dream is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Dream Office Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Office Real 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 Dream Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Office Real has no effect on the direction of Postmedia Network i.e., Postmedia Network and Dream Office go up and down completely randomly.
Pair Corralation between Postmedia Network and Dream Office
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Dream Office. In addition to that, Postmedia Network is 1.32 times more volatile than Dream Office Real. It trades about -0.01 of its total potential returns per unit of risk. Dream Office Real is currently generating about 0.0 per unit of volatility. If you would invest 2,021 in Dream Office Real on August 25, 2024 and sell it today you would lose (119.00) from holding Dream Office Real or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postmedia Network Canada vs. Dream Office Real
Performance |
| Timeline |
| Postmedia Network Canada |
| Dream Office Real |
Postmedia Network and Dream Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Dream Office
The main advantage of trading using opposite Postmedia Network and Dream Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Dream Office 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 Dream Office will offset losses from the drop in Dream Office's long position.| Postmedia Network vs. Genesis Land Development | Postmedia Network vs. ADF Group | Postmedia Network vs. Madison Pacific Properties | Postmedia Network vs. Goodfellow |
| Dream Office vs. Artis Real Estate | Dream Office vs. Boardwalk Real Estate | Dream Office vs. Allied Properties Real | Dream Office vs. HR Real Estate |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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