Correlation Between Highwood Asset and New Found
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and New Found 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 New Found 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 New Found Gold, you can compare the effects of market volatilities on Highwood Asset and New Found 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 New Found. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and New Found.
Diversification Opportunities for Highwood Asset and New Found
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highwood and New is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and New Found Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Found Gold 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 New Found. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Found Gold has no effect on the direction of Highwood Asset i.e., Highwood Asset and New Found go up and down completely randomly.
Pair Corralation between Highwood Asset and New Found
Assuming the 90 days horizon Highwood Asset Management is expected to generate 0.43 times more return on investment than New Found. However, Highwood Asset Management is 2.33 times less risky than New Found. It trades about -0.02 of its potential returns per unit of risk. New Found Gold is currently generating about -0.08 per unit of risk. If you would invest 580.00 in Highwood Asset Management on September 13, 2024 and sell it today you would lose (5.00) from holding Highwood Asset Management or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwood Asset Management vs. New Found Gold
Performance |
| Timeline |
| Highwood Asset Management |
| New Found Gold |
Highwood Asset and New Found Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and New Found
The main advantage of trading using opposite Highwood Asset and New Found positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, New Found 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 New Found will offset losses from the drop in New Found's long position.| Highwood Asset vs. Brompton Lifeco Split | Highwood Asset vs. North American Financial | Highwood Asset vs. Prime Dividend Corp | Highwood Asset vs. Financial 15 Split |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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