Correlation Between High Liner and Income Financial
Can any of the company-specific risk be diversified away by investing in both High Liner and Income Financial 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 Income Financial 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 Income Financial Trust, you can compare the effects of market volatilities on High Liner and Income Financial 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 Income Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Income Financial.
Diversification Opportunities for High Liner and Income Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between High and Income is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Income Financial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Financial Trust 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 Income Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Financial Trust has no effect on the direction of High Liner i.e., High Liner and Income Financial go up and down completely randomly.
Pair Corralation between High Liner and Income Financial
Assuming the 90 days trading horizon High Liner Foods is expected to generate 1.74 times more return on investment than Income Financial. However, High Liner is 1.74 times more volatile than Income Financial Trust. It trades about 0.51 of its potential returns per unit of risk. Income Financial Trust is currently generating about 0.43 per unit of risk. If you would invest 1,286 in High Liner Foods on September 3, 2024 and sell it today you would earn a total of 255.00 from holding High Liner Foods or generate 19.83% 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. Income Financial Trust
Performance |
| Timeline |
| High Liner Foods |
| Income Financial Trust |
High Liner and Income Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Income Financial
The main advantage of trading using opposite High Liner and Income Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Income Financial 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 Income Financial will offset losses from the drop in Income Financial'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 |
| Income Financial vs. Dividend Select 15 | Income Financial vs. Global Dividend Growth | Income Financial vs. Brompton Split Banc | Income Financial vs. Real Estate E Commerce |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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