Correlation Between High Liner and Homerun Resources
Can any of the company-specific risk be diversified away by investing in both High Liner and Homerun 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 Homerun 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 Homerun Resources, you can compare the effects of market volatilities on High Liner and Homerun 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 Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Homerun Resources.
Diversification Opportunities for High Liner and Homerun Resources
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between High and Homerun is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of High Liner i.e., High Liner and Homerun Resources go up and down completely randomly.
Pair Corralation between High Liner and Homerun Resources
Assuming the 90 days trading horizon High Liner is expected to generate 18.38 times less return on investment than Homerun Resources. But when comparing it to its historical volatility, High Liner Foods is 3.81 times less risky than Homerun Resources. It trades about 0.02 of its potential returns per unit of risk. Homerun Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Homerun Resources on October 27, 2024 and sell it today you would earn a total of 105.00 from holding Homerun Resources or generate 1050.0% 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. Homerun Resources
Performance |
| Timeline |
| High Liner Foods |
| Homerun Resources |
High Liner and Homerun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Homerun Resources
The main advantage of trading using opposite High Liner and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Homerun 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 Homerun Resources will offset losses from the drop in Homerun 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 |
| Homerun Resources vs. Nicola Mining | Homerun Resources vs. Canaf Investments | Homerun Resources vs. Aya Gold Silver | Homerun Resources vs. Upstart Investments |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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