Correlation Between Postmedia Network and Sprott Physical

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

Diversification Opportunities for Postmedia Network and Sprott Physical

-0.22

Correlation Coefficient

Postmedia Network  Sprott Physical

Very good diversification

The 3 months correlation between Postmedia and Sprott is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Postmedia Network Canada and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Postmedia Network i.e., Postmedia Network and Sprott Physical go up and down completely randomly.

Pair Corralation between Postmedia Network and Sprott Physical

Assuming the 90 days trading horizon Postmedia Network is expected to generate 1.68 times less return on investment than Sprott Physical. In addition to that, Postmedia Network is 2.37 times more volatile than Sprott Physical Gold. It trades about 0.03 of its total potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.1 per unit of volatility. If you would invest  2,917  in Sprott Physical Gold on April 25, 2025 and sell it today you would earn a total of  254.00  from holding Sprott Physical Gold or generate 8.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Postmedia Network Canada  vs.  Sprott Physical Gold

Postmedia Network Canada

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Postmedia Network Canada are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Postmedia Network is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sprott Physical Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Postmedia Network and Sprott Physical

The main advantage of trading using opposite Postmedia Network and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postmedia Network position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.

The idea behind Postmedia Network Canada and Sprott Physical Gold 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.