Correlation Between High Liner and Guangdong Investment
Can any of the company-specific risk be diversified away by investing in both High Liner and Guangdong Investment 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 Guangdong Investment 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 Guangdong Investment Limited, you can compare the effects of market volatilities on High Liner and Guangdong Investment 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 Guangdong Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Guangdong Investment.
Diversification Opportunities for High Liner and Guangdong Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and Guangdong is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Guangdong Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Investment 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 Guangdong Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Investment has no effect on the direction of High Liner i.e., High Liner and Guangdong Investment go up and down completely randomly.
Pair Corralation between High Liner and Guangdong Investment
Assuming the 90 days horizon High Liner Foods is expected to generate 0.36 times more return on investment than Guangdong Investment. However, High Liner Foods is 2.78 times less risky than Guangdong Investment. It trades about -0.11 of its potential returns per unit of risk. Guangdong Investment Limited is currently generating about -0.12 per unit of risk. If you would invest 1,010 in High Liner Foods on October 23, 2024 and sell it today you would lose (25.00) from holding High Liner Foods or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Guangdong Investment Limited
Performance |
| Timeline |
| High Liner Foods |
| Guangdong Investment |
High Liner and Guangdong Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Guangdong Investment
The main advantage of trading using opposite High Liner and Guangdong Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Guangdong Investment 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 Guangdong Investment will offset losses from the drop in Guangdong Investment's long position.| High Liner vs. Virtus Investment Partners | High Liner vs. New Residential Investment | High Liner vs. Platinum Investment Management | High Liner vs. Coor Service Management |
| Guangdong Investment vs. FORMPIPE SOFTWARE AB | Guangdong Investment vs. USU Software AG | Guangdong Investment vs. CyberArk Software | Guangdong Investment vs. High Liner Foods |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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