Correlation Between High Liner and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both High Liner and ExGen Resources 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 ExGen Resources 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 ExGen Resources, you can compare the effects of market volatilities on High Liner and ExGen Resources 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 ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and ExGen Resources.
Diversification Opportunities for High Liner and ExGen Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between High and ExGen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen Resources 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 ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of High Liner i.e., High Liner and ExGen Resources go up and down completely randomly.
Pair Corralation between High Liner and ExGen Resources
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.14 times more return on investment than ExGen Resources. However, High Liner Foods is 7.01 times less risky than ExGen Resources. It trades about 0.48 of its potential returns per unit of risk. ExGen Resources is currently generating about 0.05 per unit of risk. If you would invest 1,347 in High Liner Foods on September 12, 2024 and sell it today you would earn a total of 231.00 from holding High Liner Foods or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. ExGen Resources
Performance |
| Timeline |
| High Liner Foods |
| ExGen Resources |
High Liner and ExGen Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and ExGen Resources
The main advantage of trading using opposite High Liner and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, ExGen Resources 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| ExGen Resources vs. Arbor Metals Corp | ExGen Resources vs. Ramp Metals | ExGen Resources vs. High Liner Foods | ExGen Resources vs. Electra Battery Materials |
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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