Correlation Between High Liner and HealWELL
Can any of the company-specific risk be diversified away by investing in both High Liner and HealWELL 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 HealWELL 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 HealWELL AI, you can compare the effects of market volatilities on High Liner and HealWELL 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 HealWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and HealWELL.
Diversification Opportunities for High Liner and HealWELL
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between High and HealWELL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and HealWELL AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealWELL AI 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 HealWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealWELL AI has no effect on the direction of High Liner i.e., High Liner and HealWELL go up and down completely randomly.
Pair Corralation between High Liner and HealWELL
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.29 times more return on investment than HealWELL. However, High Liner Foods is 3.5 times less risky than HealWELL. It trades about 0.27 of its potential returns per unit of risk. HealWELL AI is currently generating about -0.13 per unit of risk. If you would invest 1,522 in High Liner Foods on November 21, 2024 and sell it today you would earn a total of 104.00 from holding High Liner Foods or generate 6.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
High Liner Foods vs. HealWELL AI
Performance |
Timeline |
High Liner Foods |
HealWELL AI |
High Liner and HealWELL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with High Liner and HealWELL
The main advantage of trading using opposite High Liner and HealWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, HealWELL 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 HealWELL will offset losses from the drop in HealWELL's long position.High Liner vs. Leons Furniture Limited | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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