Correlation Between Highwood Asset and High Liner
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and High Liner 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 High Liner 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 High Liner Foods, you can compare the effects of market volatilities on Highwood Asset and High Liner 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 High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and High Liner.
Diversification Opportunities for Highwood Asset and High Liner
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highwood and High is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and High Liner Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Liner Foods 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 High Liner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Liner Foods has no effect on the direction of Highwood Asset i.e., Highwood Asset and High Liner go up and down completely randomly.
Pair Corralation between Highwood Asset and High Liner
Assuming the 90 days horizon Highwood Asset Management is expected to under-perform the High Liner. In addition to that, Highwood Asset is 1.81 times more volatile than High Liner Foods. It trades about -0.01 of its total potential returns per unit of risk. High Liner Foods is currently generating about 0.08 per unit of volatility. If you would invest 1,516 in High Liner Foods on November 27, 2024 and sell it today you would earn a total of 84.00 from holding High Liner Foods or generate 5.54% 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. High Liner Foods
Performance |
| Timeline |
| Highwood Asset Management |
| High Liner Foods |
Highwood Asset and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and High Liner
The main advantage of trading using opposite Highwood Asset and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, High Liner 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 High Liner will offset losses from the drop in High Liner's long position.| Highwood Asset vs. Renoworks Software | Highwood Asset vs. HPQ Silicon Resources | Highwood Asset vs. Questor Technology | Highwood Asset vs. Solid Impact Investments |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
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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