Correlation Between Postmedia Network and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Plaza Retail 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 Plaza Retail 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 Plaza Retail REIT, you can compare the effects of market volatilities on Postmedia Network and Plaza Retail 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 Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Plaza Retail.
Diversification Opportunities for Postmedia Network and Plaza Retail
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Postmedia and Plaza is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Postmedia Network i.e., Postmedia Network and Plaza Retail go up and down completely randomly.
Pair Corralation between Postmedia Network and Plaza Retail
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Plaza Retail. In addition to that, Postmedia Network is 3.66 times more volatile than Plaza Retail REIT. It trades about -0.01 of its total potential returns per unit of risk. Plaza Retail REIT is currently generating about 0.07 per unit of volatility. If you would invest 322.00 in Plaza Retail REIT on September 4, 2024 and sell it today you would earn a total of 50.00 from holding Plaza Retail REIT or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Postmedia Network Canada vs. Plaza Retail REIT
Performance |
| Timeline |
| Postmedia Network Canada |
| Plaza Retail REIT |
Postmedia Network and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Plaza Retail
The main advantage of trading using opposite Postmedia Network and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.| Postmedia Network vs. Sangoma Technologies Corp | Postmedia Network vs. Oculus VisionTech | Postmedia Network vs. Lion One Metals | Postmedia Network vs. Quorum Information Technologies |
| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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