Correlation Between Thunderbird Entertainment and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Thunderbird Entertainment 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 Thunderbird Entertainment and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunderbird Entertainment Group and Postmedia Network Canada, you can compare the effects of market volatilities on Thunderbird Entertainment 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 Thunderbird Entertainment with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunderbird Entertainment and Postmedia Network.
Diversification Opportunities for Thunderbird Entertainment and Postmedia Network
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thunderbird and Postmedia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thunderbird Entertainment Grou 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 Thunderbird Entertainment 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 Thunderbird Entertainment Group 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 Thunderbird Entertainment i.e., Thunderbird Entertainment and Postmedia Network go up and down completely randomly.
Pair Corralation between Thunderbird Entertainment and Postmedia Network
Assuming the 90 days trading horizon Thunderbird Entertainment Group is expected to generate 1.31 times more return on investment than Postmedia Network. However, Thunderbird Entertainment is 1.31 times more volatile than Postmedia Network Canada. It trades about 0.21 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 166.00 in Thunderbird Entertainment Group on September 17, 2024 and sell it today you would earn a total of 23.00 from holding Thunderbird Entertainment Group or generate 13.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thunderbird Entertainment Grou vs. Postmedia Network Canada
Performance |
Timeline |
Thunderbird Entertainment |
Postmedia Network Canada |
Thunderbird Entertainment and Postmedia Network Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thunderbird Entertainment and Postmedia Network
The main advantage of trading using opposite Thunderbird Entertainment and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunderbird Entertainment 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.Thunderbird Entertainment vs. Parkit Enterprise | Thunderbird Entertainment vs. WildBrain | Thunderbird Entertainment vs. Quisitive Technology Solutions | Thunderbird Entertainment vs. Playgon Games |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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