Correlation Between High Liner and Sienna Resources
Can any of the company-specific risk be diversified away by investing in both High Liner and Sienna Resources 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 Sienna Resources 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 Sienna Resources, you can compare the effects of market volatilities on High Liner and Sienna Resources 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 Sienna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Sienna Resources.
Diversification Opportunities for High Liner and Sienna Resources
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High and Sienna is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Sienna Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna 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 Sienna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Resources has no effect on the direction of High Liner i.e., High Liner and Sienna Resources go up and down completely randomly.
Pair Corralation between High Liner and Sienna Resources
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.14 times more return on investment than Sienna Resources. However, High Liner Foods is 6.92 times less risky than Sienna Resources. It trades about -0.07 of its potential returns per unit of risk. Sienna Resources is currently generating about -0.04 per unit of risk. If you would invest 1,570 in High Liner Foods on October 24, 2024 and sell it today you would lose (35.00) from holding High Liner Foods or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Sienna Resources
Performance |
| Timeline |
| High Liner Foods |
| Sienna Resources |
High Liner and Sienna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Sienna Resources
The main advantage of trading using opposite High Liner and Sienna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Sienna Resources 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 Sienna Resources will offset losses from the drop in Sienna Resources' long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Sienna Resources vs. Endeavour Silver Corp | Sienna Resources vs. Chemtrade Logistics Income | Sienna Resources vs. Algoma Steel Group | Sienna Resources vs. Champion Iron |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |