Correlation Between Monument Mining and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Monument Mining 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 Monument Mining and Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and Postmedia Network Canada, you can compare the effects of market volatilities on Monument Mining 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 Monument Mining with a short position of Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Postmedia Network.
Diversification Opportunities for Monument Mining and Postmedia Network
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monument and Postmedia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited 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 Monument Mining 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and Postmedia Network go up and down completely randomly.
Pair Corralation between Monument Mining and Postmedia Network
Assuming the 90 days horizon Monument Mining Limited is expected to generate 1.25 times more return on investment than Postmedia Network. However, Monument Mining is 1.25 times more volatile than Postmedia Network Canada. It trades about 0.13 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about 0.0 per unit of risk. If you would invest 14.00 in Monument Mining Limited on September 5, 2024 and sell it today you would earn a total of 11.00 from holding Monument Mining Limited or generate 78.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Monument Mining Limited vs. Postmedia Network Canada
Performance |
Timeline |
Monument Mining |
Postmedia Network Canada |
Monument Mining and Postmedia Network Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Monument Mining and Postmedia Network
The main advantage of trading using opposite Monument Mining and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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.Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. MAS Gold Corp |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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