Correlation Between High Liner and Opus One
Can any of the company-specific risk be diversified away by investing in both High Liner and Opus 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 Opus 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 Opus One Resources, you can compare the effects of market volatilities on High Liner and Opus 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 Opus One. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Opus One.
Diversification Opportunities for High Liner and Opus One
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between High and Opus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Opus One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opus One 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 Opus One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opus One Resources has no effect on the direction of High Liner i.e., High Liner and Opus One go up and down completely randomly.
Pair Corralation between High Liner and Opus One
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.21 times more return on investment than Opus One. However, High Liner Foods is 4.85 times less risky than Opus One. It trades about 0.48 of its potential returns per unit of risk. Opus One Resources is currently generating about -0.03 per unit of risk. If you would invest 1,377 in High Liner Foods on September 13, 2024 and sell it today you would earn a total of 234.00 from holding High Liner Foods or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Opus One Resources
Performance |
| Timeline |
| High Liner Foods |
| Opus One Resources |
High Liner and Opus One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Opus One
The main advantage of trading using opposite High Liner and Opus One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Opus 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 Opus One will offset losses from the drop in Opus 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 |
| Opus One vs. Leveljump Healthcare Corp | Opus One vs. NeuPath Health | Opus One vs. Advent Wireless | Opus One vs. Nova Leap Health |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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