Correlation Between High Liner and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both High Liner and MidCap Financial 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 High Liner and MidCap Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and MidCap Financial Investment, you can compare the effects of market volatilities on High Liner and MidCap Financial 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 High Liner with a short position of MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and MidCap Financial.
Diversification Opportunities for High Liner and MidCap Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between High and MidCap is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv and High Liner 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 High Liner Foods are associated (or correlated) with MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of High Liner i.e., High Liner and MidCap Financial go up and down completely randomly.
Pair Corralation between High Liner and MidCap Financial
Assuming the 90 days horizon High Liner Foods is expected to under-perform the MidCap Financial. In addition to that, High Liner is 1.2 times more volatile than MidCap Financial Investment. It trades about -0.08 of its total potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.05 per unit of volatility. If you would invest 1,300 in MidCap Financial Investment on October 25, 2024 and sell it today you would earn a total of 11.00 from holding MidCap Financial Investment or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. MidCap Financial Investment
Performance |
| Timeline |
| High Liner Foods |
| MidCap Financial Inv |
High Liner and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and MidCap Financial
The main advantage of trading using opposite High Liner and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| High Liner vs. General Mills | High Liner vs. Danone SA | High Liner vs. Hormel Foods | High Liner vs. Kellogg Company |
| MidCap Financial vs. ANTA SPORTS PRODUCT | MidCap Financial vs. COLUMBIA SPORTSWEAR | MidCap Financial vs. ON SEMICONDUCTOR | MidCap Financial vs. PLAY2CHILL SA ZY |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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