Correlation Between Postmedia Network and Orbit Garant
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Orbit Garant 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 Orbit Garant 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 Orbit Garant Drilling, you can compare the effects of market volatilities on Postmedia Network and Orbit Garant 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 Orbit Garant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Orbit Garant.
Diversification Opportunities for Postmedia Network and Orbit Garant
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Postmedia and Orbit is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Orbit Garant Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Garant Drilling 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 Orbit Garant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Garant Drilling has no effect on the direction of Postmedia Network i.e., Postmedia Network and Orbit Garant go up and down completely randomly.
Pair Corralation between Postmedia Network and Orbit Garant
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Orbit Garant. But the stock apears to be less risky and, when comparing its historical volatility, Postmedia Network Canada is 1.81 times less risky than Orbit Garant. The stock trades about -0.23 of its potential returns per unit of risk. The Orbit Garant Drilling is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Orbit Garant Drilling on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Orbit Garant Drilling or generate 11.84% 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. Orbit Garant Drilling
Performance |
| Timeline |
| Postmedia Network Canada |
| Orbit Garant Drilling |
Postmedia Network and Orbit Garant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Orbit Garant
The main advantage of trading using opposite Postmedia Network and Orbit Garant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Orbit Garant 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 Orbit Garant will offset losses from the drop in Orbit Garant's long position.| Postmedia Network vs. Globex Mining Enterprises | Postmedia Network vs. American Hotel Income | Postmedia Network vs. Northstar Clean Technologies | Postmedia Network vs. Oculus VisionTech |
| Orbit Garant vs. Foraco International SA | Orbit Garant vs. Geodrill Limited | Orbit Garant vs. Major Drilling Group | Orbit Garant vs. Mccoy Global |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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