Correlation Between High Liner and Advent Wireless
Can any of the company-specific risk be diversified away by investing in both High Liner and Advent Wireless 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 Advent Wireless 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 Advent Wireless, you can compare the effects of market volatilities on High Liner and Advent Wireless 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 Advent Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Advent Wireless.
Diversification Opportunities for High Liner and Advent Wireless
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Advent is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Advent Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Wireless 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 Advent Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Wireless has no effect on the direction of High Liner i.e., High Liner and Advent Wireless go up and down completely randomly.
Pair Corralation between High Liner and Advent Wireless
Assuming the 90 days trading horizon High Liner is expected to generate 1.58 times less return on investment than Advent Wireless. But when comparing it to its historical volatility, High Liner Foods is 1.92 times less risky than Advent Wireless. It trades about 0.03 of its potential returns per unit of risk. Advent Wireless is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Advent Wireless on August 26, 2024 and sell it today you would earn a total of 9.00 from holding Advent Wireless or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Advent Wireless
Performance |
| Timeline |
| High Liner Foods |
| Advent Wireless |
High Liner and Advent Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Advent Wireless
The main advantage of trading using opposite High Liner and Advent Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Advent Wireless 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 Advent Wireless will offset losses from the drop in Advent Wireless' long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Advent Wireless vs. Telus Corp | Advent Wireless vs. Toronto Dominion Bank | Advent Wireless vs. Manulife Financial Corp | Advent Wireless vs. Canadian Natural Resources |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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