Correlation Between Postmedia Network and Mammoth Resources
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Mammoth Resources 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 Mammoth Resources 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 Mammoth Resources Corp, you can compare the effects of market volatilities on Postmedia Network and Mammoth Resources 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 Mammoth Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Mammoth Resources.
Diversification Opportunities for Postmedia Network and Mammoth Resources
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Postmedia and Mammoth is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Mammoth Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Resources Corp 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 Mammoth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Resources Corp has no effect on the direction of Postmedia Network i.e., Postmedia Network and Mammoth Resources go up and down completely randomly.
Pair Corralation between Postmedia Network and Mammoth Resources
Assuming the 90 days trading horizon Postmedia Network Canada is expected to generate 0.6 times more return on investment than Mammoth Resources. However, Postmedia Network Canada is 1.67 times less risky than Mammoth Resources. It trades about 0.03 of its potential returns per unit of risk. Mammoth Resources Corp is currently generating about -0.33 per unit of risk. If you would invest 124.00 in Postmedia Network Canada on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Postmedia Network Canada or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postmedia Network Canada vs. Mammoth Resources Corp
Performance |
| Timeline |
| Postmedia Network Canada |
| Mammoth Resources Corp |
Postmedia Network and Mammoth Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Mammoth Resources
The main advantage of trading using opposite Postmedia Network and Mammoth Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Mammoth Resources 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 Mammoth Resources will offset losses from the drop in Mammoth Resources' long position.| Postmedia Network vs. Canadian General Investments | Postmedia Network vs. 2028 Investment Grade | Postmedia Network vs. Leading Edge Materials | Postmedia Network vs. Western Investment |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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