Correlation Between Algoma Central and High Liner
Can any of the company-specific risk be diversified away by investing in both Algoma Central and High Liner 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 Algoma Central and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algoma Central and High Liner Foods, you can compare the effects of market volatilities on Algoma Central and High Liner 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 Algoma Central with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Central and High Liner.
Diversification Opportunities for Algoma Central and High Liner
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Algoma and High is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Central and High Liner Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Liner Foods and Algoma Central 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 Algoma Central are associated (or correlated) with High Liner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Liner Foods has no effect on the direction of Algoma Central i.e., Algoma Central and High Liner go up and down completely randomly.
Pair Corralation between Algoma Central and High Liner
Assuming the 90 days trading horizon Algoma Central is expected to under-perform the High Liner. But the stock apears to be less risky and, when comparing its historical volatility, Algoma Central is 1.81 times less risky than High Liner. The stock trades about -0.01 of its potential returns per unit of risk. The High Liner Foods is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,303 in High Liner Foods on August 25, 2024 and sell it today you would earn a total of 203.00 from holding High Liner Foods or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algoma Central vs. High Liner Foods
Performance |
| Timeline |
| Algoma Central |
| High Liner Foods |
Algoma Central and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Central and High Liner
The main advantage of trading using opposite Algoma Central and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Central position performs unexpectedly, High Liner 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 High Liner will offset losses from the drop in High Liner's long position.| Algoma Central vs. Goodfellow | Algoma Central vs. Leons Furniture Limited | Algoma Central vs. High Liner Foods | Algoma Central vs. Exco Technologies Limited |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Exco Technologies Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |