Correlation Between Financial and Highwood Asset

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Financial and Highwood Asset 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 Financial and Highwood Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Highwood Asset Management, you can compare the effects of market volatilities on Financial and Highwood Asset 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 Financial with a short position of Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Highwood Asset.

Diversification Opportunities for Financial and Highwood Asset

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Financial and Highwood is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management and Financial 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 Financial 15 Split are associated (or correlated) with Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Financial i.e., Financial and Highwood Asset go up and down completely randomly.

Pair Corralation between Financial and Highwood Asset

Assuming the 90 days trading horizon Financial 15 Split is expected to generate 0.44 times more return on investment than Highwood Asset. However, Financial 15 Split is 2.29 times less risky than Highwood Asset. It trades about 0.23 of its potential returns per unit of risk. Highwood Asset Management is currently generating about 0.0 per unit of risk. If you would invest  749.00  in Financial 15 Split on September 13, 2024 and sell it today you would earn a total of  238.00  from holding Financial 15 Split or generate 31.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Financial 15 Split  vs.  Highwood Asset Management

 Performance 
       Timeline  
Financial 15 Split 

Risk-Adjusted Performance

27 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Financial displayed solid returns over the last few months and may actually be approaching a breakup point.
Highwood Asset Management 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Highwood Asset Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Highwood Asset is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Financial and Highwood Asset Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Financial and Highwood Asset

The main advantage of trading using opposite Financial and Highwood Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Highwood Asset 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 Highwood Asset will offset losses from the drop in Highwood Asset's long position.
The idea behind Financial 15 Split and Highwood Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like