Correlation Between High Liner and Rubicon Organics
Can any of the company-specific risk be diversified away by investing in both High Liner and Rubicon Organics 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 Rubicon Organics 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 Rubicon Organics, you can compare the effects of market volatilities on High Liner and Rubicon Organics 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 Rubicon Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Rubicon Organics.
Diversification Opportunities for High Liner and Rubicon Organics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High and Rubicon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Rubicon Organics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Organics 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 Rubicon Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Organics has no effect on the direction of High Liner i.e., High Liner and Rubicon Organics go up and down completely randomly.
Pair Corralation between High Liner and Rubicon Organics
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.22 times more return on investment than Rubicon Organics. However, High Liner Foods is 4.63 times less risky than Rubicon Organics. It trades about 0.11 of its potential returns per unit of risk. Rubicon Organics is currently generating about 0.0 per unit of risk. If you would invest 1,121 in High Liner Foods on September 3, 2024 and sell it today you would earn a total of 420.00 from holding High Liner Foods or generate 37.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Rubicon Organics
Performance |
| Timeline |
| High Liner Foods |
| Rubicon Organics |
High Liner and Rubicon Organics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Rubicon Organics
The main advantage of trading using opposite High Liner and Rubicon Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Rubicon Organics 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 Rubicon Organics will offset losses from the drop in Rubicon Organics' 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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