Correlation Between Brockhaus Capital and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and Highlight Communications 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 Brockhaus Capital and Highlight Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Highlight Communications AG, you can compare the effects of market volatilities on Brockhaus Capital and Highlight Communications 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 Brockhaus Capital with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Highlight Communications.
Diversification Opportunities for Brockhaus Capital and Highlight Communications
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brockhaus and Highlight is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and Highlight Communications go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Highlight Communications
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 0.99 times more return on investment than Highlight Communications. However, Brockhaus Capital Management is 1.01 times less risky than Highlight Communications. It trades about 0.02 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.05 per unit of risk. If you would invest 2,056 in Brockhaus Capital Management on October 19, 2024 and sell it today you would earn a total of 284.00 from holding Brockhaus Capital Management or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Highlight Communications AG
Performance |
| Timeline |
| Brockhaus Capital |
| Highlight Communications |
Brockhaus Capital and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Highlight Communications
The main advantage of trading using opposite Brockhaus Capital and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| Brockhaus Capital vs. ALTAIR RES INC | Brockhaus Capital vs. SOGECLAIR SA INH | Brockhaus Capital vs. CITY OFFICE REIT | Brockhaus Capital vs. Corsair Gaming |
| Highlight Communications vs. The Yokohama Rubber | Highlight Communications vs. THRACE PLASTICS | Highlight Communications vs. NEWELL RUBBERMAID | Highlight Communications vs. ALBIS LEASING AG |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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