Correlation Between High Liner and JAPAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both High Liner and JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES, you can compare the effects of market volatilities on High Liner and JAPAN AIRLINES 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 JAPAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and JAPAN AIRLINES.
Diversification Opportunities for High Liner and JAPAN AIRLINES
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and JAPAN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and JAPAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN AIRLINES 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 JAPAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN AIRLINES has no effect on the direction of High Liner i.e., High Liner and JAPAN AIRLINES go up and down completely randomly.
Pair Corralation between High Liner and JAPAN AIRLINES
Assuming the 90 days horizon High Liner Foods is expected to generate 1.31 times more return on investment than JAPAN AIRLINES. However, High Liner is 1.31 times more volatile than JAPAN AIRLINES. It trades about -0.08 of its potential returns per unit of risk. JAPAN AIRLINES is currently generating about -0.11 per unit of risk. If you would invest 1,020 in High Liner Foods on October 25, 2024 and sell it today you would lose (20.00) from holding High Liner Foods or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. JAPAN AIRLINES
Performance |
| Timeline |
| High Liner Foods |
| JAPAN AIRLINES |
High Liner and JAPAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and JAPAN AIRLINES
The main advantage of trading using opposite High Liner and JAPAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, JAPAN AIRLINES 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 JAPAN AIRLINES will offset losses from the drop in JAPAN AIRLINES's long position.| High Liner vs. General Mills | High Liner vs. Danone SA | High Liner vs. Hormel Foods | High Liner vs. Kellogg Company |
| JAPAN AIRLINES vs. Cognizant Technology Solutions | JAPAN AIRLINES vs. UPDATE SOFTWARE | JAPAN AIRLINES vs. X FAB Silicon Foundries | JAPAN AIRLINES vs. PKSHA TECHNOLOGY INC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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