Correlation Between Postmedia Network and Nubian Resources
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Nubian 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 Nubian 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 Nubian Resources, you can compare the effects of market volatilities on Postmedia Network and Nubian 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 Nubian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Nubian Resources.
Diversification Opportunities for Postmedia Network and Nubian Resources
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Postmedia and Nubian is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Nubian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nubian Resources 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 Nubian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nubian Resources has no effect on the direction of Postmedia Network i.e., Postmedia Network and Nubian Resources go up and down completely randomly.
Pair Corralation between Postmedia Network and Nubian Resources
Assuming the 90 days trading horizon Postmedia Network is expected to generate 9.17 times less return on investment than Nubian Resources. But when comparing it to its historical volatility, Postmedia Network Canada is 2.4 times less risky than Nubian Resources. It trades about 0.01 of its potential returns per unit of risk. Nubian Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Nubian Resources on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Nubian Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Postmedia Network Canada vs. Nubian Resources
Performance |
| Timeline |
| Postmedia Network Canada |
| Nubian Resources |
Postmedia Network and Nubian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Nubian Resources
The main advantage of trading using opposite Postmedia Network and Nubian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Nubian 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 Nubian Resources will offset losses from the drop in Nubian Resources' long position.| Postmedia Network vs. Dream Industrial Real | Postmedia Network vs. Canlan Ice Sports | Postmedia Network vs. Computer Modelling Group | Postmedia Network vs. Nicola Mining |
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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