Correlation Between Caribbean Utilities and High Liner
Can any of the company-specific risk be diversified away by investing in both Caribbean Utilities 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 Caribbean Utilities and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caribbean Utilities and High Liner Foods, you can compare the effects of market volatilities on Caribbean Utilities 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 Caribbean Utilities with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribbean Utilities and High Liner.
Diversification Opportunities for Caribbean Utilities and High Liner
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caribbean and High is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Caribbean Utilities 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 Caribbean Utilities 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 Caribbean Utilities 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 Caribbean Utilities i.e., Caribbean Utilities and High Liner go up and down completely randomly.
Pair Corralation between Caribbean Utilities and High Liner
Assuming the 90 days trading horizon Caribbean Utilities is expected to generate 2.08 times more return on investment than High Liner. However, Caribbean Utilities is 2.08 times more volatile than High Liner Foods. It trades about 0.02 of its potential returns per unit of risk. High Liner Foods is currently generating about 0.02 per unit of risk. If you would invest 1,296 in Caribbean Utilities on August 26, 2024 and sell it today you would earn a total of 92.00 from holding Caribbean Utilities or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.96% |
| Values | Daily Returns |
Caribbean Utilities vs. High Liner Foods
Performance |
| Timeline |
| Caribbean Utilities |
| High Liner Foods |
Caribbean Utilities and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caribbean Utilities and High Liner
The main advantage of trading using opposite Caribbean Utilities and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caribbean Utilities 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.| Caribbean Utilities vs. Maxim Power Corp | Caribbean Utilities vs. ATCO | Caribbean Utilities vs. Capstone Infrastructure Corp | Caribbean Utilities vs. Richards Packaging Income |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |