Correlation Between Postmedia Network and PJX Resources
Can any of the company-specific risk be diversified away by investing in both Postmedia Network and PJX Resources 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 PJX Resources 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 PJX Resources, you can compare the effects of market volatilities on Postmedia Network and PJX Resources 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 PJX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postmedia Network and PJX Resources.
Diversification Opportunities for Postmedia Network and PJX Resources
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Postmedia and PJX is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and PJX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJX Resources 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 PJX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJX Resources has no effect on the direction of Postmedia Network i.e., Postmedia Network and PJX Resources go up and down completely randomly.
Pair Corralation between Postmedia Network and PJX Resources
Assuming the 90 days trading horizon Postmedia Network is expected to generate 2.39 times less return on investment than PJX Resources. But when comparing it to its historical volatility, Postmedia Network Canada is 1.25 times less risky than PJX Resources. It trades about 0.02 of its potential returns per unit of risk. PJX Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.50 in PJX Resources on September 6, 2024 and sell it today you would earn a total of 2.50 from holding PJX Resources or generate 26.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Postmedia Network Canada vs. PJX Resources
Performance |
Timeline |
Postmedia Network Canada |
PJX Resources |
Postmedia Network and PJX Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Postmedia Network and PJX Resources
The main advantage of trading using opposite Postmedia Network and PJX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, PJX Resources 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 PJX Resources will offset losses from the drop in PJX Resources' long position.Postmedia Network vs. Perseus Mining | Postmedia Network vs. Canso Credit Trust | Postmedia Network vs. National Bank of | Postmedia Network vs. Royal Bank of |
PJX Resources vs. Economic Investment Trust | PJX Resources vs. CNJ Capital Investments | PJX Resources vs. Primaris Retail RE | PJX Resources vs. Plaza Retail REIT |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |