Correlation Between High Liner and Martina Minerals
Can any of the company-specific risk be diversified away by investing in both High Liner and Martina Minerals 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 Martina Minerals 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 Martina Minerals Corp, you can compare the effects of market volatilities on High Liner and Martina Minerals 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 Martina Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Martina Minerals.
Diversification Opportunities for High Liner and Martina Minerals
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between High and Martina is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Martina Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martina Minerals Corp 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 Martina Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martina Minerals Corp has no effect on the direction of High Liner i.e., High Liner and Martina Minerals go up and down completely randomly.
Pair Corralation between High Liner and Martina Minerals
Assuming the 90 days trading horizon High Liner is expected to generate 1501.5 times less return on investment than Martina Minerals. But when comparing it to its historical volatility, High Liner Foods is 40.77 times less risky than Martina Minerals. It trades about 0.01 of its potential returns per unit of risk. Martina Minerals Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Martina Minerals Corp on November 5, 2024 and sell it today you would earn a total of 2.50 from holding Martina Minerals Corp or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Martina Minerals Corp
Performance |
| Timeline |
| High Liner Foods |
| Martina Minerals Corp |
High Liner and Martina Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Martina Minerals
The main advantage of trading using opposite High Liner and Martina Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Martina Minerals 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 Martina Minerals will offset losses from the drop in Martina Minerals' long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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