Correlation Between Postmedia Network and Skeena Resources
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Skeena 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 Skeena 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 Skeena Resources, you can compare the effects of market volatilities on Postmedia Network and Skeena 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 Skeena Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Skeena Resources.
Diversification Opportunities for Postmedia Network and Skeena Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Postmedia and Skeena is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Skeena Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skeena 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 Skeena Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skeena Resources has no effect on the direction of Postmedia Network i.e., Postmedia Network and Skeena Resources go up and down completely randomly.
Pair Corralation between Postmedia Network and Skeena Resources
Assuming the 90 days trading horizon Postmedia Network Canada is expected to under-perform the Skeena Resources. But the stock apears to be less risky and, when comparing its historical volatility, Postmedia Network Canada is 2.7 times less risky than Skeena Resources. The stock trades about -0.36 of its potential returns per unit of risk. The Skeena Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,406 in Skeena Resources on November 28, 2024 and sell it today you would earn a total of 15.00 from holding Skeena Resources or generate 1.07% 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. Skeena Resources
Performance |
| Timeline |
| Postmedia Network Canada |
| Skeena Resources |
Postmedia Network and Skeena Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postmedia Network and Skeena Resources
The main advantage of trading using opposite Postmedia Network and Skeena Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Skeena 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 Skeena Resources will offset losses from the drop in Skeena Resources' long position.| Postmedia Network vs. TGS Esports | Postmedia Network vs. Cogeco Communications | Postmedia Network vs. Brookfield Office Properties | Postmedia Network vs. Canaf Investments |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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