Correlation Between Brookfield Investments and High Liner
Can any of the company-specific risk be diversified away by investing in both Brookfield Investments 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 Brookfield Investments and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Investments and High Liner Foods, you can compare the effects of market volatilities on Brookfield Investments 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 Brookfield Investments with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Investments and High Liner.
Diversification Opportunities for Brookfield Investments and High Liner
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brookfield and High is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Investments 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 Brookfield Investments 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 Brookfield Investments 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 Brookfield Investments i.e., Brookfield Investments and High Liner go up and down completely randomly.
Pair Corralation between Brookfield Investments and High Liner
Assuming the 90 days trading horizon Brookfield Investments is expected to generate 628.14 times less return on investment than High Liner. But when comparing it to its historical volatility, Brookfield Investments is 3.16 times less risky than High Liner. It trades about 0.0 of its potential returns per unit of risk. High Liner Foods is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 1,286 in High Liner Foods on September 3, 2024 and sell it today you would earn a total of 255.00 from holding High Liner Foods or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Brookfield Investments vs. High Liner Foods
Performance |
| Timeline |
| Brookfield Investments |
| High Liner Foods |
Brookfield Investments and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Investments and High Liner
The main advantage of trading using opposite Brookfield Investments and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Investments 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.| Brookfield Investments vs. Apple Inc CDR | Brookfield Investments vs. NVIDIA CDR | Brookfield Investments vs. Microsoft Corp CDR | Brookfield Investments vs. Amazon CDR |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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