Correlation Between Postmedia Network and Power Fi
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Power Fi 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 Power Fi 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 Power Fi 440, you can compare the effects of market volatilities on Postmedia Network and Power Fi 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 Power Fi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Power Fi.
Diversification Opportunities for Postmedia Network and Power Fi
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Postmedia and Power is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Power Fi 440 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Fi 440 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 Power Fi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Fi 440 has no effect on the direction of Postmedia Network i.e., Postmedia Network and Power Fi go up and down completely randomly.
Pair Corralation between Postmedia Network and Power Fi
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Power Fi. In addition to that, Postmedia Network is 5.21 times more volatile than Power Fi 440. It trades about -0.29 of its total potential returns per unit of risk. Power Fi 440 is currently generating about 0.02 per unit of volatility. If you would invest 1,661 in Power Fi 440 on December 4, 2024 and sell it today you would earn a total of 3.00 from holding Power Fi 440 or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postmedia Network Canada vs. Power Fi 440
Performance |
| Timeline |
| Postmedia Network Canada |
| Power Fi 440 |
Postmedia Network and Power Fi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Power Fi
The main advantage of trading using opposite Postmedia Network and Power Fi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Power Fi 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 Power Fi will offset losses from the drop in Power Fi's long position.| Postmedia Network vs. Farstarcap Investment Corp | Postmedia Network vs. Advent Wireless | Postmedia Network vs. Cogeco Communications | Postmedia Network vs. Economic Investment Trust |
| Power Fi vs. Mako Mining Corp | Power Fi vs. Western Copper and | Power Fi vs. Primaris Retail RE | Power Fi vs. Pace Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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