Correlation Between IShares Canadian and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both IShares Canadian 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 IShares Canadian and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and Postmedia Network Canada, you can compare the effects of market volatilities on IShares Canadian 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 IShares Canadian with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Postmedia Network.
Diversification Opportunities for IShares Canadian and Postmedia Network
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Postmedia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid 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 IShares Canadian 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 iShares Canadian HYBrid 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 IShares Canadian i.e., IShares Canadian and Postmedia Network go up and down completely randomly.
Pair Corralation between IShares Canadian and Postmedia Network
Assuming the 90 days trading horizon iShares Canadian HYBrid is expected to generate 0.12 times more return on investment than Postmedia Network. However, iShares Canadian HYBrid is 8.67 times less risky than Postmedia Network. It trades about 0.16 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.09 per unit of risk. If you would invest 1,951 in iShares Canadian HYBrid on August 31, 2024 and sell it today you would earn a total of 19.00 from holding iShares Canadian HYBrid or generate 0.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Canadian HYBrid vs. Postmedia Network Canada
Performance |
Timeline |
iShares Canadian HYBrid |
Postmedia Network Canada |
IShares Canadian and Postmedia Network Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Canadian and Postmedia Network
The main advantage of trading using opposite IShares Canadian and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian 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.IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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