Correlation Between High Liner and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both High Liner and Brookfield Asset 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 Brookfield Asset 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 Brookfield Asset Management, you can compare the effects of market volatilities on High Liner and Brookfield Asset 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 Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Brookfield Asset.
Diversification Opportunities for High Liner and Brookfield Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Brookfield is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of High Liner i.e., High Liner and Brookfield Asset go up and down completely randomly.
Pair Corralation between High Liner and Brookfield Asset
Assuming the 90 days trading horizon High Liner Foods is expected to generate 1.74 times more return on investment than Brookfield Asset. However, High Liner is 1.74 times more volatile than Brookfield Asset Management. It trades about 0.02 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.02 per unit of risk. If you would invest 1,370 in High Liner Foods on September 1, 2024 and sell it today you would earn a total of 156.00 from holding High Liner Foods or generate 11.39% 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. Brookfield Asset Management
Performance |
| Timeline |
| High Liner Foods |
| Brookfield Asset Man |
High Liner and Brookfield Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Brookfield Asset
The main advantage of trading using opposite High Liner and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset'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 |
| Brookfield Asset vs. Quipt Home Medical | Brookfield Asset vs. Converge Technology Solutions | Brookfield Asset vs. Rogers Communications | Brookfield Asset vs. Verizon Communications CDR |
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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