Correlation Between Postmedia Network and Faction Investment

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Can any of the company-specific risk be diversified away by investing in both Postmedia Network and Faction Investment 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 Faction Investment 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 Faction Investment Group, you can compare the effects of market volatilities on Postmedia Network and Faction Investment 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 Faction Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and Faction Investment.

Diversification Opportunities for Postmedia Network and Faction Investment

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Postmedia and Faction is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Faction Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faction Investment 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 Faction Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faction Investment has no effect on the direction of Postmedia Network i.e., Postmedia Network and Faction Investment go up and down completely randomly.

Pair Corralation between Postmedia Network and Faction Investment

If you would invest  128.00  in Postmedia Network Canada on October 4, 2024 and sell it today you would lose (4.00) from holding Postmedia Network Canada or give up 3.12% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Postmedia Network Canada  vs.  Faction Investment Group

 Performance 
       Timeline  
Postmedia Network Canada 

Risk-Adjusted Performance

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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 comparatively stable basic indicators, Postmedia Network is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
Faction Investment 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Postmedia Network and Faction Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Postmedia Network and Faction Investment

The main advantage of trading using opposite Postmedia Network and Faction Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Faction Investment 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 Faction Investment will offset losses from the drop in Faction Investment's long position.
The idea behind Postmedia Network Canada and Faction Investment Group 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.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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