Correlation Between Postmedia Network and T2 Metals
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and T2 Metals 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 T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on Postmedia Network and T2 Metals 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and T2 Metals.
Diversification Opportunities for Postmedia Network and T2 Metals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Postmedia and TWO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Postmedia Network i.e., Postmedia Network and T2 Metals go up and down completely randomly.
Pair Corralation between Postmedia Network and T2 Metals
Assuming the 90 days trading horizon Postmedia Network Canada is expected to generate 0.28 times more return on investment than T2 Metals. However, Postmedia Network Canada is 3.53 times less risky than T2 Metals. It trades about -0.29 of its potential returns per unit of risk. T2 Metals Corp is currently generating about -0.29 per unit of risk. If you would invest 132.00 in Postmedia Network Canada on August 29, 2024 and sell it today you would lose (10.00) from holding Postmedia Network Canada or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Postmedia Network Canada vs. T2 Metals Corp
Performance |
| Timeline |
| Postmedia Network Canada |
| T2 Metals Corp |
Postmedia Network and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and T2 Metals
The main advantage of trading using opposite Postmedia Network and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, T2 Metals 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 T2 Metals will offset losses from the drop in T2 Metals' long position.| Postmedia Network vs. Royal Helium | Postmedia Network vs. Excelsior Mining Corp | Postmedia Network vs. Vista Gold | Postmedia Network vs. TeraGo Inc |
| T2 Metals vs. First Majestic Silver | T2 Metals vs. Ivanhoe Energy | T2 Metals vs. Orezone Gold Corp | T2 Metals vs. Faraday Copper Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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