Correlation Between High Liner and Lion One
Can any of the company-specific risk be diversified away by investing in both High Liner and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on High Liner and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Lion One.
Diversification Opportunities for High Liner and Lion One
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between High and Lion is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of High Liner i.e., High Liner and Lion One go up and down completely randomly.
Pair Corralation between High Liner and Lion One
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.51 times more return on investment than Lion One. However, High Liner Foods is 1.94 times less risky than Lion One. It trades about 0.15 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.02 per unit of risk. If you would invest 1,337 in High Liner Foods on August 28, 2024 and sell it today you would earn a total of 197.00 from holding High Liner Foods or generate 14.73% 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. Lion One Metals
Performance |
| Timeline |
| High Liner Foods |
| Lion One Metals |
High Liner and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Lion One
The main advantage of trading using opposite High Liner and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One'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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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