Correlation Between Triple Flag and Postmedia Network

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Can any of the company-specific risk be diversified away by investing in both Triple Flag and Postmedia Network 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 Triple Flag and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and Postmedia Network Canada, you can compare the effects of market volatilities on Triple Flag and Postmedia Network 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 Triple Flag with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Postmedia Network.

Diversification Opportunities for Triple Flag and Postmedia Network

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Triple and Postmedia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and Postmedia Network Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postmedia Network Canada and Triple Flag 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 Triple Flag Precious are associated (or correlated) with Postmedia Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postmedia Network Canada has no effect on the direction of Triple Flag i.e., Triple Flag and Postmedia Network go up and down completely randomly.

Pair Corralation between Triple Flag and Postmedia Network

Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 0.52 times more return on investment than Postmedia Network. However, Triple Flag Precious is 1.92 times less risky than Postmedia Network. It trades about 0.08 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.01 per unit of risk. If you would invest  1,750  in Triple Flag Precious on August 25, 2024 and sell it today you would earn a total of  574.00  from holding Triple Flag Precious or generate 32.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Triple Flag Precious  vs.  Postmedia Network Canada

 Performance 
       Timeline  
Triple Flag Precious 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Triple Flag Precious are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Triple Flag is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
Postmedia Network Canada 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Postmedia Network Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Triple Flag and Postmedia Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Triple Flag and Postmedia Network

The main advantage of trading using opposite Triple Flag and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag position performs unexpectedly, Postmedia Network 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 Postmedia Network will offset losses from the drop in Postmedia Network's long position.
The idea behind Triple Flag Precious and Postmedia Network Canada pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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