Correlation Between Postmedia Network and Black Iron
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Black Iron 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 Black Iron 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 Black Iron, you can compare the effects of market volatilities on Postmedia Network and Black Iron 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 Black Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Black Iron.
Diversification Opportunities for Postmedia Network and Black Iron
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Postmedia and Black is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Black Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Iron 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 Black Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Iron has no effect on the direction of Postmedia Network i.e., Postmedia Network and Black Iron go up and down completely randomly.
Pair Corralation between Postmedia Network and Black Iron
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Black Iron. But the stock apears to be less risky and, when comparing its historical volatility, Postmedia Network Canada is 5.5 times less risky than Black Iron. The stock trades about -0.37 of its potential returns per unit of risk. The Black Iron is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Black Iron on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Black Iron or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postmedia Network Canada vs. Black Iron
Performance |
| Timeline |
| Postmedia Network Canada |
| Black Iron |
Postmedia Network and Black Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Black Iron
The main advantage of trading using opposite Postmedia Network and Black Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Black Iron 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 Black Iron will offset losses from the drop in Black Iron's long position.| Postmedia Network vs. XXIX Metal Corp | Postmedia Network vs. Adex Mining | Postmedia Network vs. Cogeco Communications | Postmedia Network vs. South Pacific Metals |
| Black Iron vs. Northcliff Resources | Black Iron vs. St Augustine Gold | Black Iron vs. Mammoth Resources Corp | Black Iron vs. Black Widow Resources |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |