Correlation Between High Liner and Apple
Can any of the company-specific risk be diversified away by investing in both High Liner and Apple 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 High Liner and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Apple Inc CDR, you can compare the effects of market volatilities on High Liner and Apple 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 High Liner with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Apple.
Diversification Opportunities for High Liner and Apple
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Apple is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and High Liner 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 High Liner Foods are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of High Liner i.e., High Liner and Apple go up and down completely randomly.
Pair Corralation between High Liner and Apple
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.91 times more return on investment than Apple. However, High Liner Foods is 1.1 times less risky than Apple. It trades about -0.07 of its potential returns per unit of risk. Apple Inc CDR is currently generating about -0.42 per unit of risk. If you would invest 1,570 in High Liner Foods on October 24, 2024 and sell it today you would lose (35.00) from holding High Liner Foods or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Apple Inc CDR
Performance |
| Timeline |
| High Liner Foods |
| Apple Inc CDR |
High Liner and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Apple
The main advantage of trading using opposite High Liner and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Apple vs. Pace Metals | Apple vs. Major Drilling Group | Apple vs. Bird Construction | Apple vs. Lion One 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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