Correlation Between Highwood Asset and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and Canaf Investments 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 Canaf Investments 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 Canaf Investments, you can compare the effects of market volatilities on Highwood Asset and Canaf Investments 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 Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and Canaf Investments.
Diversification Opportunities for Highwood Asset and Canaf Investments
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highwood and Canaf is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments 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 Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Highwood Asset i.e., Highwood Asset and Canaf Investments go up and down completely randomly.
Pair Corralation between Highwood Asset and Canaf Investments
Assuming the 90 days horizon Highwood Asset is expected to generate 110.59 times less return on investment than Canaf Investments. But when comparing it to its historical volatility, Highwood Asset Management is 2.36 times less risky than Canaf Investments. It trades about 0.01 of its potential returns per unit of risk. Canaf Investments is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Canaf Investments on November 5, 2024 and sell it today you would earn a total of 7.00 from holding Canaf Investments or generate 21.88% 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. Canaf Investments
Performance |
| Timeline |
| Highwood Asset Management |
| Canaf Investments |
Highwood Asset and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and Canaf Investments
The main advantage of trading using opposite Highwood Asset and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Highwood Asset vs. Upstart Investments | Highwood Asset vs. Canaf Investments | Highwood Asset vs. Andean Precious Metals | Highwood Asset vs. T2 Metals Corp |
| Canaf Investments vs. Richelieu Hardware | Canaf Investments vs. T2 Metals Corp | Canaf Investments vs. Datable Technology Corp | Canaf Investments vs. Ramp Metals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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