Correlation Between FIH MOBILE and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both FIH MOBILE 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 FIH MOBILE and Highlight Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIH MOBILE and Highlight Communications AG, you can compare the effects of market volatilities on FIH MOBILE 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 FIH MOBILE with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIH MOBILE and Highlight Communications.
Diversification Opportunities for FIH MOBILE and Highlight Communications
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FIH and Highlight is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding FIH MOBILE and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and FIH MOBILE 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 FIH MOBILE 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 FIH MOBILE i.e., FIH MOBILE and Highlight Communications go up and down completely randomly.
Pair Corralation between FIH MOBILE and Highlight Communications
Assuming the 90 days trading horizon FIH MOBILE is expected to generate 0.49 times more return on investment than Highlight Communications. However, FIH MOBILE is 2.03 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 9.70 in FIH MOBILE on October 31, 2024 and sell it today you would earn a total of 1.30 from holding FIH MOBILE or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIH MOBILE vs. Highlight Communications AG
Performance |
| Timeline |
| FIH MOBILE |
| Highlight Communications |
FIH MOBILE and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIH MOBILE and Highlight Communications
The main advantage of trading using opposite FIH MOBILE and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIH MOBILE 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.| FIH MOBILE vs. Treasury Wine Estates | FIH MOBILE vs. 24SEVENOFFICE GROUP AB | FIH MOBILE vs. Penn National Gaming | FIH MOBILE vs. CONTAGIOUS GAMING INC |
| Highlight Communications vs. Alfa Financial Software | Highlight Communications vs. The Boston Beer | Highlight Communications vs. UPDATE SOFTWARE | Highlight Communications vs. ASURE SOFTWARE |
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.
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