Correlation Between Highwood Asset and Bce
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and Bce 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 Bce 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 Bce Inc Pref, you can compare the effects of market volatilities on Highwood Asset and Bce 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 Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and Bce.
Diversification Opportunities for Highwood Asset and Bce
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highwood and Bce is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref 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 Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of Highwood Asset i.e., Highwood Asset and Bce go up and down completely randomly.
Pair Corralation between Highwood Asset and Bce
Assuming the 90 days horizon Highwood Asset Management is expected to generate 3.97 times more return on investment than Bce. However, Highwood Asset is 3.97 times more volatile than Bce Inc Pref. It trades about 0.05 of its potential returns per unit of risk. Bce Inc Pref is currently generating about 0.04 per unit of risk. If you would invest 450.00 in Highwood Asset Management on November 5, 2024 and sell it today you would earn a total of 141.00 from holding Highwood Asset Management or generate 31.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwood Asset Management vs. Bce Inc Pref
Performance |
| Timeline |
| Highwood Asset Management |
| Bce Inc Pref |
Highwood Asset and Bce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and Bce
The main advantage of trading using opposite Highwood Asset and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.| Highwood Asset vs. Constellation Software | Highwood Asset vs. Fairfax Financial Holdings | Highwood Asset vs. FirstService Corp | Highwood Asset vs. Intact Financial |
| Bce vs. Solid Impact Investments | Bce vs. Network Media Group | Bce vs. Western Investment | Bce vs. Brookfield Investments |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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