Correlation Between Highwood Asset and Acadian Timber
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and Acadian Timber 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 Highwood Asset and Acadian Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwood Asset Management and Acadian Timber Corp, you can compare the effects of market volatilities on Highwood Asset and Acadian Timber 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 Highwood Asset with a short position of Acadian Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and Acadian Timber.
Diversification Opportunities for Highwood Asset and Acadian Timber
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highwood and Acadian is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and Acadian Timber Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Timber Corp and Highwood Asset 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 Highwood Asset Management are associated (or correlated) with Acadian Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Timber Corp has no effect on the direction of Highwood Asset i.e., Highwood Asset and Acadian Timber go up and down completely randomly.
Pair Corralation between Highwood Asset and Acadian Timber
Assuming the 90 days horizon Highwood Asset Management is expected to generate 1.76 times more return on investment than Acadian Timber. However, Highwood Asset is 1.76 times more volatile than Acadian Timber Corp. It trades about 0.09 of its potential returns per unit of risk. Acadian Timber Corp is currently generating about -0.19 per unit of risk. If you would invest 580.00 in Highwood Asset Management on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Highwood Asset Management or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwood Asset Management vs. Acadian Timber Corp
Performance |
| Timeline |
| Highwood Asset Management |
| Acadian Timber Corp |
Highwood Asset and Acadian Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and Acadian Timber
The main advantage of trading using opposite Highwood Asset and Acadian Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, Acadian Timber 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 Acadian Timber will offset losses from the drop in Acadian Timber's long position.| Highwood Asset vs. Royal Bank of | Highwood Asset vs. Cogeco Communications | Highwood Asset vs. Pembina Pipeline Corp | Highwood Asset vs. US Financial 15 |
| Acadian Timber vs. Altair Resources | Acadian Timber vs. Diamond Estates Wines | Acadian Timber vs. Partners Value Investments | Acadian Timber vs. Highwood Asset Management |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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